The Manhattan Office market ended the first quarter 2019 with a vacancy rate of 8.0% – up from 7.9% over the previous quarter. The availability rate decreased marginally from 11.9% to 11.7%. Rental rates increased during the first quarter, reaching an average of $78.98 PSF.
Q1 2019 ended with portions of the Hudson Yards megaproject opening to the public (the mixed-use, multi-property, modern and amenity rich project on the west side of Midtown). A concerning trend is the lack of new tenant entrants into Manhattan, for much of the new stock is being absorbed by existing tenants.
Market Trends
- Coworking firms make up 12 percent of office leasing volume
- Increasing amount of sublease space in Manhattan makes up nearly 30 percent of all available space
- Workspace trends have reduced the average footprint from 300-400 square feet per employee to less than 200 square feet
- The demand for updated office space has been expanding beyond Manhattan into North Brooklyn, Downtown Brooklyn and Northwest Queens