NYC Office Market Report, First Quarter 2018
NYC Office Market Report, First Quarter 2018 was compiled using data provided by Costar, the Commercial Real Estate Information Company.
In the first quarter of 2018 the average quoted rent in the NYC office market across all building classes was $61.15 per square foot. This represents a $0.37 PSF decrease compared to the fourth quarter of 2017. The vacancy rate in the first quarter was 8.0%, unchanged over the previous quarter.
NYC Office Market Rents and Vacancy by Neighborhood
First quarter 2018 average quoted office rents and vacancy by neighborhood is found in the table below.
Remarks: (1) The tables above list the average quoted asking rent reported to Costar. Some office buildings do not publish this information. (2) After lease negotiation the actual contract rent is usually lower. (3) Additional Tenant Incentives for leasing space in a particular building may include: (a) A rent abatement (free rent); (b) A cash contribution provided by the Landlord for the Tenant’s construction of the office premises; and (c) The Landlord’s offer to build-to-suit the office premises.
6 Largest NYC Office Leases Signed in Q1 2018
JP Morgan Chase & Co.: 418,241 RSF at 390 Madison Avenue in the Grand Central Station sub-market. Omnicom Media Group: 287,520 RSF at 195 Broadway in the World Trade Center sub-market. WeWork: 255,000 RSF at 500 7th Avenue in the Penn Plaza sub-market. McKinsey & Company, Inc. 184,389 RSF at 3 World Trade Center in the World Trade Center sub-market. CIT Group: 150,000 RSF renewal at 11 W 42nd Street in the Times Square sub-market. Nasdaq Inc: 112,373 RSF at 4 Times Square in the Times Square sub-market.
New NYC Office Building Deliveries
Chelsea 540 at 540 West 26th Street. 92% leased by The World School and Roc Nation.
5 LARGEST NYC OFFICE CONSTRUCTION PROJECTS
There was 15,526,512 square feet of office space being constructed at year-end 2017.
3 World Trade Center: 2,861,402 RSF. Delivery Q1 2018. 37% preleased. Developer-Silverstein Properties, Inc. 30 Hudson Yards (500 West 33rd St.): 2,600,000 RSF. Delivery Q3 2019. 100% pre-leased. Developer- Oxford Properties Group. 1 Manhattan West (400 West 33rd St.): 2,216,609 RSF. Delivery Q1 2019. 55% pre-leased. Developer- Brookfield Office Properties. One Vanderbilt Avenue: 1,732,955 RSF. Delivery Q3 2020. 100% pre-leased. Developer- SL Green Realty Corp., Inc. 55 Hudson Yards (550 West 34th St.): 1,556,136 RSF. Delivery Q3 2018. 86% pre-leased. Developer- The Related Companies.
Strategies for Reducing NYC Office Expense
(1) Space Reduction and Redesign: Businesses can reduce the size of their offices by modifying the design and reducing the area occupied by each employee. Use our office space calculator to estimate your essential requirement.
(2) Flex Work, Business Centers and Telecommuting: Flexible work schedules may allow two or more employees to utilize a specific work area. Some companies use hourly or daily rentals at off-site business centers for part-time staff and conferences. Where practical utilize telecommuting.
(3) Relocation: Consider moving from a high rent building to a more economical location. During the current real estate cycle many Class B and mid-block buildings have been upgraded and now provide contemporary work environments and modernized infrastructure at affordable rental rates.
ABOUT COGENT REALTY ADVISORS
Cogent Realty Advisors is an independent and licensed NO FEE Realtor with over 15 years of experience representing businesses that lease NYC office space. Our goal is to help you find the right office at the right price. For information, phone Mitchell Waldman at (212) 509-4049.