Manhattan Office Rents Show Positive Signs in Third Quarter Report

Colliers International published their Manhattan 3rd quarter Office Market Report recently.  The report indicates that leasing activity between January and September reached levels not seen since 2002.  Also year to date activity has already surpassed 2008-2012 levels.

The robust job market has precipitated the growth in the office market sector.  Specifically from August 2017 to August 2018, New York City added 74,200 new private sector jobs which was a 1.9% increase.  Also, unemployment has dropped 0.8% within the year as well.  Manhattan leasing was showing significant health as it has shown a 4 year high.  Leasing increased 20.1% from the 3rd quarter of 2017 and 25.4% over Manhattan's 5 year historical average and 48.5% over the 10 year average.  Quarterly inventory remains unchanged at 10.2% for the quarter and slightly above (.4%) year over year.

The news on asking rents is even better for landlords.  The report shows that asking rents has hit an all-time quarterly record at $75.86/ sf.  The asking rents is up 2.3% from the 2nd quarter which is the largest quarterly increase in 3 years.

In an interview at Globest.com, Craig Caggiano, Colliers International’s executive director states that absorption is a great indicator of the future.  It is noted that because of new construction and relocation tenants are moving from Midtown to Hudson Yards and Downtown.  In what is considered a "home run" he states  “Those tenants leave big holes in the market.  Those spaces are coming into our availability right now and into 2019. The fact that we are able to absorb that availability because of strong, relatively stable leasing has been a very important market indicator.”

The top sub-markets for asking rents are the following:

1.  Hudson Yards/Manhattan West- $106.19 sf
2.  Plaza District- $96.28 sf
3.  Soho- $89.93 sf
4.  Midtown- $84.33 sf
5.  Greenwich Village- $82.48

The top sub-markets for leasing activity by square footage are the following:

1.  Midtown- 7,346,224
2.  Midtown South- 3,088,334
3.  Plaza District- 2,810,959
4.  Grand Central- 2,379,560
5.  Times Square- 1,654,621

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/manhattan-office-rents-show-positive-signs-in-third-quarter-report/