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NYC Commercial Real Estate Industry Expected to be Strong in 2019

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New York City's commercial real estate industry is looking forward to a strong and vibrant 2019. Photo Credit: Shutterstock

New York City’s commercial real estate industry is looking forward to a strong and vibrant 2019.

Growth in jobs and a stronger economy mean good times ahead for leases in Manhattan. According to Colliers International, commercial leases below 65th Street in Manhattan totaled 41.75 million square feet and increase of 12.7% over the previous year.

Beyond that, Colliers continued, the average asking price for a rent in Manhattan was $75.90 per square foot, with a vacancy rate of only 9.5%, which is reportedly the lowest in three years.

“On the agency side, it was vibrant, and on the tenant rep side, there was a surge at the end of the year and a lot that will continue into the new year,” A. Mitti Liebersohn of Avison Young, told the New York Post.

Firms with names like Pfizer’s Facebook’s Google, Disney, JPMorgan Chase and Amazon all have real estate agents at work, buying, selling, or remodeling office space in Manhattan.

The strong predictions come in the wake of a strong 2018 for Manhattan office-leases. According to The Real Deal, “leasing activity – which includes new deals and expansions – hit 32.4 million square feet last year, the highest annual total since 2000, according to CBRE.

“At the turn of the century, Manhattan saw 33.1 million square feet of deals, and over the past 10 years the average has been 25.8 million square feet,” Real Deal continued. “Last year’s total surpassed that average by 26 percent. The strong economy and – until recently – a booming stock market helped drive business growth. And expanding office employment helped buoy the year’s numbers.”

GlobeSt.com agreed, quoting Rich Persichetti, VP, tri-state region research lead at Cushman & Wakefield as saying, “In my 20 years of tracking NYC real estate, I never thought I’d be saying Midtown South rents are the highest in the nation but it did happen in 2018.”

At $95.80 per square foot, the web site continued, “they were almost 17% higher than in Midtown. However, he clarified that the building stock in Midtown is eight times greater than in Midtown South. Persichetti pointed to the high demand, lack of available supply and newly built construction projects bearing triple digit rents for boosting the district’s statistical average. During a press conference call, in which Cushman & Wakefield presented its research, Persichetti said last year was the strongest leasing year on record for Manhattan office demand. Although Manhattan’s vacancy rose to 9.2%, he underscored it has been well below 10% for more than four years.”

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