As I sat on my porch handing out candy bars on Halloween earlier this week, I started thinking about how the names of some candy relate to occurrences in Manhattan real estate. So here are the thoughts I conjured up for the tricks and treats of the office market for 2016.
Good & Plenty: With 9.3 million square feet of new office product delivered to the Manhattan office market since 2013, and an additional 12.9 million square feet under construction, there is certainly good quality space and plenty of it set to be delivered on the market by 2020.
Milk Duds: Of the 19 submarkets in Manhattan, Hudson Square/West Village was the biggest dud over the past year with a 510-basis-point increase in vacancy to 10.7 percent.
Butterfinger: The TAMI sector’s lead as top industry for new leasing activity throughout Manhattan is starting to slip away. It now only has a 26 percent market share, compared to 32.7 percent in June, and the gap between TAMI and financial services is only 2.9 percent.
3 Musketeers: The Sixth Avenue/Rock Center, Madison/Fifth and Park Avenue submarkets make up the Plaza District. Combined, these three submarkets account for more than one-third of Midtown’s total inventory and make up the most exclusive submarket in New York City, as Class A direct asking rents increased 4.3 percent over the past year to $100.35 per square foot.
Runts: SoHo is the runt of the liter when it comes to the 19 Manhattan submarkets, but despite having the least amount of inventory—3.9 million square feet—it has the highest Class B direct asking rent by far. At $92.14 per square foot, SoHo’s Class B asking rent is 19.9 percent higher than the next closest submarket.
100 Grand: Through the first three quarters of 2016, there were 32 leases greater than 100,000 square feet signed, 14 of which were renewals. This is slightly off of last year’s pace when 35 leases were signed, with 11 being renewals. From a square footage standpoint, 2016 has the edge over 2015 8.3 million to 7.1 million square feet.
PayDay: AXA Financial sold 787 Seventh Avenue this year $1.9 billion, the highest payday for a New York City office investment this year.
Now I will go back to “testing” my kids’ candy to make sure it’s okay for them to eat. I hope everyone had a Happy Halloween!