Last week, Midtown dominated the competition in the Manhattan Office Market Summer Olympics and won three of the four gold medals awarded for the supply and demand events. This week, Midtown South and Downtown will try to catch up in the pricing and office investment categories. So, let the second week of games begin!
The pricing categories start off with the overall asking rental change comparing July 2012 with July 2016. Downtown knocks out the competition with a 48.3 percent increase to $59.34 per square foot. Midtown South goes the distance and grabs the silver with a 41.9 percent increase to $68.85 per square foot. Midtown stumbles out of its corner this week and gets the bronze with only a 19.6 percent increase to $79.31 per square foot.
The next event is the change in overall net effective rents. Midtown South spikes the competition and easily wins the gold with a 37.5 percent increase to $58.54 per square foot. Downtown blocks out Midtown for the silver with a 19 percent increase to $42.14 per square foot compared to Midtown’s 16.3 percent jump to $65.88 per square foot.
The third event starts off the investment categories. This event focuses on the change in the number of office buildings sold. Downtown wins the gold easily, as it’s the only market with an increase in properties sold—seven by midyear 2016 compared with six by midyear 2012. Both Midtown and Midtown South had less buildings sold—down five and 10, respectively—to nab the silver and bronze.
The fourth and fifth events are aligned, comparing the increase in dollar investment volume and average price per square foot. Midtown takes home the gold in both of these events with a 240.0 percent jump in sales volume with $8.5 billion completed by midyear 2016 and an 88.1 percent increase in the price per square foot to $1,614. Downtown wins the silver for both events—166.7 percent increase in sales volume to $3.2 billion and a 52.3 percent increase to $556 for the average price per square foot. Midtown South takes home bronze in both events as there was a 21.7 percent decline in sales volume to $940 million and a 34.7 percent increase in the average price per square foot to $1,192.
It’s time for the closing ceremonies to get the final medal count and crown Midtown the most decorated market of the Manhattan Office Market Summer games with five gold medals.
Richard Persichetti is the vice president of research and marketing at Cushman & Wakefield.