Q1 2017 MANHATTAN OFFICE LEASING
4 World Trade Center
Year-Over-Year the office leasing activity increased by approximately 27.63% in Q1 2017 in Manhattan's main business districts. Although there was a negative net absorption of 1.65 million square feet, compared with Q1 2016's negative 2.28 million square feet, there was 630,000SF of more leasing activity.
Although there was more activity the overall vacancy rate increased to 8.4% by the end of the first quarter. Comparatively, the vacancy rate was 8.2% at the end of the fourth quarter 2016, 8.2% at the end of the third quarter 2016, and 8.1% at the end of the second quarter 2016.
Class-A projects reported a vacancy rate of 9.4% at the end of the first quarter 2017, 9.2% at the end of the fourth quarter 2016, 9.5% at the end of the third quarter 2016, and 9.4% at the end of the second quarter 2016.
Class-B projects reported a vacancy rate of 7.4% at the end of the first quarter 2017, 7.3% at the end of the fourth quarter 2016, 6.9% at the end of the third quarter 2016, and 6.8% at the end of the second quarter 2016.
Class-C projects reported a vacancy rate of 5.8% at the end of the first quarter 2017, 5.4% at the end of fourth quarter 2016, 5.1% at the end of the third quarter 2016, and 5.3% at the end of the second quarter 2016.
The Financial District and World Trade Center area had its best quarter in two years. Leases including Spotify’s 378,000 square foot lease at 4 World Trade Center, brought the area to 2.3 million square feet of activity. This is 44 percent above the quarterly average since 2007.
In areas of Midtown South where activity is usually highest among tech and advertising firms, rents increased 11.7% to an average of $76.65 per square foot. Downtown rents dipped 2.2 percent to $56.45 per square foot, while Midtown rents crept up 1.1 percent to $75.78 per square foot.
There are about 11.7 million square feet worth of new office space expected to hit the market in Manhattan through 2020. Half of that space is committed.