NYC Office Market Report, Year-End 2018
NYC Office Market Report, Year-End 2018 was compiled by Cogent Realty Advisors using data provided by Costar, the Commercial Real Estate Information Company. This report is written for business owners that need accurate information about the local office market.
Cogent Realty Advisors is an independent and licensed NO FEE Realtor with 20 years of experience representing businesses that lease NYC office space.
NYC Office Market Snapshot
At year-end 2018 the average quoted rent in the NYC office market across all building classes (A, B & C quality) was $62.00 per square foot. This is a $0.48 PSF (0.8%) increase compared to $61.52 PSF in the third quarter. The vacancy rate in the fourth quarter was 7.9%, an increase from the prior quarter’s 7.7%. Additional market data is found below.
Rent and Vacancy By Neighborhood
Fourth quarter average quoted office rent and vacancy by neighborhood is found in the table below.
NOTES: (a) The tables above list the average quoted asking rent reported to Costar. Some office buildings do not publish this information. (b) After lease negotiation the actual contract rent is usually lower.
5 Largest NYC Office Leases Signed in Q4 2018
Deutsche Financial Services, Inc: 1,213,998 RSF at One Columbus Circle (Time Warner Center).
Bloomberg LP: 467,537 RSF renewal at 120 Park Avenue in the Grand Central district.
Google: 266,021 RSF at 315 Hudson Street in the Hudson Square district.
MPG Operations LLC: 252,299 RSF at 399 Park Avenue in the Plaza district.
Top 3 Office Construction Projects at Year- End 2018
At year-end there was 17,261,375 square feet of office space under construction.
The Spiral at 66 Hudson Boulevard: 2,850,000 RSF. Delivery Q4 2022. 28% pre-leased by Pfizer.
30 Hudson Yards (500 West 33rd St.): 2,600,000 RSF. Delivery Q3 2019. 100% pre-leased.
One Manhattan West (400 West 33rd St.): 2,216,609 RSF. Delivery Q1 2019. 86% pre-leased.
3 Largest NYC Office Buildings Delivered in 2018
3 World Trade Center: 2,861,402 RSF.
512 West 22nd Street: 242,000 RSF.
61 Ninth Avenue: 167,170 RSF.
Strategies for Reducing Office expense
(1) Relocate for Savings: Consider moving from a high rent building to a more economical location. During the current bull market many “value-priced” Class B buildings have been upgraded and now provide new lobbies and elevators, new mechanical infrastructure and newly constructed office spaces.
(2) Space Reduction and Redesign: Businesses can reduce the size of their offices by modifying the design and the area occupied by each employee. Use our office space calculator to estimate your size requirement.
(3) 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.
Links for News about NYC & Global Real Estate
It is estimated that in 2018, 18% of all office space leased in NYC was by coworking companies: Coworking Leasing Activity Increased 200% Last Year- Report
But investors are becoming wary due to poor financial performance and over-saturation: SoftBank planned to invest $16B into WeWork. That number just got way smaller.
Some boutique financial firms are paying unprecedented rents for luxury office space: Triple Digit Office Rents Broaden Their Base
Landlords are finally responding to the blight of long term store vacancy: Retailers rejoice: Landlords are lowering rents to meet the market
Slowing GDP growth will result in lower levels of real estate activity: Why Real Estate Activity will Inevitably Slow
ABOUT COGENT REALTY ADVISORS
Cogent Realty Advisors is an independent and licensed NO FEE Realtor with 20 years of experience representing businesses that lease NYC office space. We will find your company the right office at the right price. For information, phone Mitchell Waldman at (212) 509-4049.