Stat of the Week: 1.6 Percent
The cost of school supplies relative to Manhattan asking rents
It is back to school time once again, and with that come parents frantically running around to purchase school supplies throughout the New York City region. To celebrate this fun time of year, we’re issuing a second-annual Stat of the Week Back to School Index. The Huntington Backpack Index estimates that the cost of school supplies is up in two of the three main educational levels this year, elementary and middle school. Luckily for me, my oldest son started high school last week, which had a slight drop in the cost of school supplies. Meanwhile, the Manhattan office market had increases in Class A direct average asking rents for two of the three major office markets. So let’s compare the change in costs and pricing between the grade levels and office markets and see where they pan out.
Midtown South/High School: Decreases
The cost of high school supplies declined 0.6 percent from one year ago, as the average cost per student dropped to $1,489. Midtown South Class A direct asking rents dipped from an all-time high of $93.02 per square foot and dipped 3.3 percent year-over-year through August to $89.99 per square foot. Although demand in Midtown South slowed this year, the drop in pricing is due more to higher-priced space being leased. Expect Midtown South Class A rents to exceed $90 per square foot again, as new developments are scheduled to hit the stats over the next few quarters.
Midtown/Elementary School: Smallest Increases
Parents of elementary school students will face a manageable increase of 0.5 percent in school supplies this year, as the average cost edged up to $662 per child. Although Midtown overall direct average asking rents were down, Class A asking rents increased 0.9 percent to $88.68 per square foot. The increase, although negligible, was market wide, as six of the nine Midtown submarkets had higher direct Class A asking rents than one year ago.
Downtown/Middle School: Largest Increases
Middle School parents beware: School supplies skyrocketed 4.6 percent this year to an average cost per child of $1,001. Downtown Class A direct average asking rents increased 1.6 percent to $60.51 per square foot, marking the highest level since February 2016. With demand up (new leasing activity rose 53 percent) and supply down year-over-year (overall vacancy was down 50 basis points), asking rent levels will likely remain steady for several quarters.