Stat of the Week: Midtown Madness Part I, 150-basis-point drop
Hello, friends: This year marks the third annual Stat of the Week Midtown Madness tournament, and with all of the major upsets occurring in the first round of the actual National Collegiate Athletic Association pool this year, we might see a highly favored Midtown submarket or two to get knocked out early as well. The Midtown Madness champion last year was the Penn Station submarket, but did it have a strong enough 12-month performance to repeat as champion in 2016?
Since there are nine Midtown submarkets, we start off with dividing them into an East and West region, and with five submarkets in the West, there is a need for a play-in round. The two smallest submarkets in the West, Penn Station and Madison/Fifth, will face off based on the largest percentage decline in available space over the past year. Penn Station available space dropped 11 percent to 828,909 square feet, while Madison/Fifth only dipped 4 percent to 3.2 million square feet. Penn Station wins its entrance into the tournament to try to repeat as champion.
With the Elite 8 Midtown submarkets seeded by total market size, the first round will be decided by the largest basis point vacancy change. In the East region, the No. 1-seeded Grand Central had a 90-basis-point drop in vacancy to 10.6 percent in the past year and easily defeats No. 4-seeded Murray Hill where vacancy only dipped 20 basis points to 6.8 percent. In the other East region contest, No. 2-seeded Park Avenue had the largest vacancy decline in the first round with a 150-basis-point decline to 10.1 percent, crushing the East Side/U.N. submarket where the vacancy rate is up 70 basis points to 5.9 percent since last year.
In the West region, the No. 1-seeded Sixth Avenue/Rock Center submarket’s 100-basis-point vacancy decline to 7.1 percent narrowly edged out the defending champ, Penn Station, where vacancy dropped 70 basis points to 5.9 percent. In the final matchup of the first round, the tournament has its first upset as third-seeded West Side trounces Times Square South. The West Side posted a 40-basis-point drop to 10.1 percent, while Times Square South vacancy jumped 190 basis points to 9.5 percent.
Be sure to come back next week to read which submarket wins the Midtown Madness tournament!