The short-term outlook for office construction will be sluggish, according to a new report, but the New York Building Congress is forecasting better days ahead over the long term. The document points to several decades of under-building and an increase in demand for modern office space as major factors in its prediction that Manhattan will be able to support a significant level of new construction.
Office employment in New York City (NYC) is still below the peak level it hit in July of 2008 of over 1.7 million jobs, but conditions are improving. In 2011, 28,000 jobs were added to the City’s economy, and 36,000 more have been added since January of 2012. These higher employment numbers are helping the office leasing sector get back on its feet in the aftermath of the recession.
In the first quarter of 2012, vacancy rates dropped to 9.1 per cent. In the same period last year, the rate was sitting at 10 per cent. Commercial property rents are on the rise, with tenants paying an average of $52.78 (£33.55) per sq. ft.
The City’s central business district will add six new buildings in 2012, opening up a further 2.1 million square feet of space. The Building Congress is forecasting the amount of new office in 2013 to decrease to 1.7 million square feet.
Developers which currently have projects underway should have no trouble finding commercial tenants for their properties once they are ready for lease. World Trade Center One is already over 55 per cent leased 18 months before completion, and World Trade Center Four, which is scheduled for completion in early 2014, is expected to follow a similar pattern. Other new towers which will be attracting new tenants in the next few years are 3WTC, 250 West 55th Street, 7 Bryant Park, and the International Gem Tower.
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