Stat of the Week: 13.2 Million Square Feet
During the current Manhattan office market expansion cycle, there has been over 9.7 million square feet of new construction/redeveloped properties delivered from 2013 to 2016. With an average inventory age of over 83 years old, the Manhattan office market is in need of new office product, and much more is on its way. From 2017 through 2020, an additional 13.2 million square feet is set to be added throughout the market. Midtown has the most on tap, as 10 buildings totaling more than 9.6 million square feet are set to come online over the next four years. In Midtown South, eight properties are scheduled to be constructed through 2019 but only total just under 1.1 million square feet. Only one property Downtown is expected to be completed, with the 2.5 million-square-foot 3 World Trade Center finishing in 2018. Beyond 2020, there is another 17.4 million square feet of proposed office development, but that is a topic for a later column.
This year has the least amount of new product hitting the market over the next four years, as five properties totaling 1.5 million square feet are set to complete throughout 2017. The year will be highlighted by the redevelopment of the 843,675-square-foot building at 390 Madison Avenue that is being redeveloped by L&L Acquisitions.
With little new product coming online in 2017, the following two years are expected to bring 10.2 million square feet to the market, the highest two-year total since the late 1980s. In 2018, seven properties are expected to be delivered, totaling over 4.4 million square feet of new office space. This group of buildings are headlined by the aforementioned 3 World Trade Center along with the 1.4-million-square-foot 55 Hudson Yards, which is already 50.1 percent pre-leased.
In 2019, even more new product is scheduled to be delivered to the market, as another six office properties will be completed and total just under 5.8 million square feet. This group of properties is led by two office towers on the Far West Side, the 2.6-million-square-foot 30 Hudson Yards and the 2.1-million-square One Manhattan West.
And, as if all these new office developments were not enough, 2020 wraps up with the expected completion of 1 Vanderbilt, the 1.5-million-square-foot office tower certain to change the skyline along the east side of Midtown. This development recently had a 29 percent partial interest purchase by the National Pension Service of Korea for $525 million from SL Green Realty Corp., the majority owner.