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Strong rental demand for office buildings in New York City in 2019

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2019-03-27 05:47:13

According to Colliers International, Manhattan's total leasing revenue increased by 12.7%, and the vacancy rate was only 9.5%.

 

Real estate developers expect the New York commercial building rental market to be optimistic this year. (Fotolia)

Despite the cooling trend in housing sales in New York, the average price of Manhattan apartments fell below a million dollars for the first time in three years. However, the real estate industry expects that the prospects for commercial real estate in New York City will be good in 2019, and the office leasing market is full of dynamism and vitality.

Manhattan leasing prospects are bullish as employment grows and the economy strengthens. According to Colliers International, commercial leases below Manhattan's 65th Street totaled 41.75 million square feet, up 12.7% from the previous year.

In addition, Manhattan's average rent asking price is $5.90 per square foot; the vacancy rate is only 9.5%, the lowest in three years.

"Intermediary business is also quite hot; in terms of tenant representatives, the number of inquiries and transactions increased sharply at the end of last year, and many new tenants have expressed their willingness to renew their leases this year." A broker told The New York Post .


Large companies such as pharmaceutical giants Pfizer, Facebook, Google, Disney, JPMorgan Chase, and Amazon all have Manhattan offices that hire real estate agents to buy, sell, or modify. The forecast for strong real estate in New York City's commercial real estate is mainly due to the recovery of the Manhattan office leasing market in 2018. According to the CBRE data of the commercial real estate group, the leased area of office buildings reached 32.4 million square feet in 2018, including leases for new leases and extensions. This is the highest annual total since 2000. Real estate media TRD reported that entering the new 21st century, Manhattan is expected to have a lease of 33.1 million square feet, while in the past 10 years, the average annual leased area was 25.8 million square feet. “The total amount last year exceeded the annual average of 26%. The strong economy and booming business development have driven the rise of commercial real estate.”

 

Rich Persichetti, head of the real estate consultancy DTZ, said that Manhattan's Midtown South District had the highest rent, with a monthly rent of $95.80 per square foot, which was nearly 17% higher than Midtown, which surprised him.
He analyzed the reasons for this: large demand, insufficient supply, and the rent per unit area of the new building exceeded 100 yuan, which led to an increase in the average price of the area.
In contrast to the housing market, since the last economic recession, New York developers have been targeting high-margin buyers and targeting the affluent buyer market. As a result, over the years, millions of dollars of luxury apartments have been surplus, and moderately priced houses have been caused by insufficient housing. Price increased. With the imbalance between supply and demand and the interest rate hike, the housing market in New York has shown a soft trend.
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Tags: rich persichetti midtown new york developers intermediary business new york city
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