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Market Research - New York

United States: New York/ Manhattan office market - 2018

Investment in Chicago CBD and suburban markets will continue to remain strong in 2019.

Leasing activity tops 34 million SF for first time since 2014


The Manhattan market closed strong in the fourth quarter, ending 2018 at over 34 million SF, the highest level since 2014. There were 35 new leasing transactions in excess of 50,000 SF, including 16 transactions over 100,000 SF. All markets witnessed positive net absorption for the quarter, which hasn’t been the case since 2015. The FIRE sector accounted for a third of all leasing activity, recording 10 transactions exceeding 100,000 SF. The coworking sector continued to make an impact, representing a sizeable 15% of leasing activity for the year. Midtown continued to dominate large block deals, recording 10 new transactions exceeding 100,000 SF. Midtown South witnessed a resurgence from the apparel and technology sector, recording four new transactions over 100,000 SF, driven in large part by Google’s leases in the Hudson Square submarket and Ralph Lauren’s lease in the Chelsea submarket.



Availability dips, average asking rents increase to all-time high


A robust quarter of leasing activity coupled with a decrease in major large block additions led to a decline in the availability rate, falling below 11% for the first time since 2016, ending the fourth quarter of 2018 at 10.6%. All markets witnessed a drop in the availability rate, with Downtown seeing the greatest, falling from 14.9% to 13.3%. Midtown South’s availability rate dropped below 9% for the first time since 2016, falling from 9.6% to 8.9%. Manhattan’s average asking rents inched up marginally from last quarter, ending the fourth quarter of 2018 at $74.92 PSF, an all-time high. More notably, Midtown South’s average asking rent continued to climb to new heights, finishing the year at $79.99 PSF, only $0.18 PSF behind Midtown. Large concession packages continue to impact net effective rents although asking rents remain at an all-time high.



Sale volume ahead 32% from same period last year. 


Total sales volume ended the fourth quarter of 2018 at $5.5 billion, with an average sale price of $842 PSF, bringing the year-to-date total sale volume to $19.1 billion, 32% ahead of the same period last year. Major transactions recorded this quarter include the sale of 425 Lexington Avenue, purchased by the Vanbarton Group from J.P. Morgan Asset Management for approximately $701 million or $935 PSF. Manhattan’s prime cap rate remained stable at 4.0%.


At a Glance NYC office market 2018
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