NYC Building More Offices Than It Has Since The '80s
According to a NY Building Congress report, more than 20M SF of office space across 23 new buildings will be completed in Manhattan over the next five years.
NYC is expected to add at least 25.8M SF of office space between 2010 and 2019, a sizable increase from the 19.4M SF added between 2000 and 2009—although, the report notes, the latter number was offset by the 10M SF lost in the 9/11 attacks. NY Building Congress president Richard Anderson, who will step down after this year, described the current decade as the best for new office construction since the '80s.
The bulk of new office space is coming to Hudson Yards, the World Trade Center and in East Midtown.
Brooklyn and LIC have 13.4M SF of new office space under construction or in the planning stages, 9.2M SF of which could be ready for occupancy before 2020. And 10M SF is in the pipeline for Brooklyn, mainly centered around the Brooklyn Navy Yard, Downtown Brooklyn, DUMBO, Williamsburg and Red Hook. Most of LIC’s 3.4M SF of new office will be centered in Tishman Speyer's 1.1M SF Gotham Center, which is fully financed and expected to open in 2019.
New Manhattan office projects worth a combined $1.5B were started in the first half of 2016, a sharp decrease from the $5.7B started in 2015. But, 2015 saw the start of multiple Hudson Yards towers, and 2016’s still an increase over 2014’s $1.2B, 2013’s $910M and 2012’s $829M.
In the outer boroughs, there were $323M in office construction starts in the first of 2016, a sharp increase from $126M in the same time frame last year. The boroughs also accounted for 17% of all construction starts, up from 2% in 2015 and 7% in 2014.
Alterations and renovations to existing office space accounted for 87% of the $1.9B in the first half of 2016’s construction projects citywide, up from 2015’s 43% of construction starts.
NYC office employment surpassed 1.9M for the first time in the city’s history in March, and is continuing to grow at a consistent pace.
According to CBRE estimates, Manhattan availability is hovering around 11%, with 7.4M% of Manhattan office inventory remaining vacant and asking rents to continue to rise. By the end of 2016, 29M SF is expected to be leased, a slight decline from 2015’s 30M SF.
