MANHATTAN WEST LEADS IN Q3 LEASES
New York City’s Vacancy Increases to 8.2% Net Absorption Negative (845,017) SF in the Quarter The New York City Office market ended the third quarter 2017 with a vacancy rate of 8.2%. The vacancy rate was up over the previous quarter, with net absorption totaling
negative (845,017) square feet in the third quarter. Vacant sublease space increased in the quarter, ending the quarter at 5,385,230 square feet. Rental rates ended the third quarter
at $65.70, an increase over the previous quarter. A total of four buildings delivered to the market in the quarter totaling 361,287 square feet, with 15,500,149 square feet still under
construction at the end of the quarter.
ABSORPTION
Net absorption for the overall New York City office market was negative (845,017) square feet in the third quarter 2017. That compares to negative (180,847) square feet in the second
quarter 2017, negative (898,124) square feet in the first quarter 2017, and positive 1,336,613 square feet in the fourth quarter 2016.
Tenants moving out of large blocks of space in 2017 include: Citibank reducing its office footprint by 149,351 square feet at 485 Lexington Avenue, Take Two Interactive moving out
of 86,751 square feet at 622 Broadway downsizing to 56,872 square feet at 1133 Avenue of the Americas and Royal Alliance reducing its footprint by 84,484 square feet at 200 Liberty
Street.
Tenants moving into large blocks of space in 2017 include: White & Case expanding into 468,218 square feet at 1221 Avenue of the Americas; MetLife, Inc. moving into 428,500
square feet at 200 Park Avenue from Three Bryant Park and Salesforce.com consolidating several New York offices into 210,496 square feet at Three Bryant Park. In the third quarter, Brookfield's Manhattan West had some largest blocks of leased space with Amazon taking 365,000 square feet at 5 Manhattan West, and Accenture taking 250,000 square feet at 1 Manhattan West.
The Class-A office market recorded net absorption of negative (29,351) square feet in the third quarter 2017, compared to negative (88,459) square feet in the second quarter 2017, negative (8,119) in the first quarter 2017, and positive 2,128,176 in the fourth quarter 2016.
The Class-B office market recorded net absorption of negative (875,723) square feet in the third quarter 2017, compared to positive 253,446 square feet in the second quarter 2017, negative (532,258) in the first quarter 2017, and negative (633,528) in the fourth quarter 2016.
The Class-C office market recorded net absorption of positive 60,057 square feet in the third quarter 2017 compared to negative (345,834) square feet in the second quarter 2017, negative (357,747) in the first quarter 2017, and negative (158,035) in the fourth quarter 2016.
Net absorption for New York City’s central business district was negative (176,997) square feet in the third quarter 2017. That compares to negative (45,269) square feet in the second quarter 2017, positive 27,296 in the first quarter 2017, and negative (620,828) in the fourth quarter 2016.
Net absorption for the suburban markets was negative (668,020) square feet in the third quarter 2017. That compares to negative (135,578) square feet in second quarter 2017, negative
(925,420) in the first quarter 2017, and positive 1,957,441 in the fourth quarter 2016.
VACANCY
The office vacancy rate in the New York City market area increased to 8.2% at the end of the third quarter 2017. The vacancy rate was 8.0% at the end of the second quarter 2017, 7.9% at the end of the first quarter 2017, and 7.9% at the end of the fourth quarter 2016.
Class-A projects reported a vacancy rate of 9.1% at the end of the third quarter 2017, 9.0% at the end of the second quarter 2017, 9.0% at the end of the first quarter 2017, and
9.0% at the end of the fourth quarter 2016.
Class-B projects reported a vacancy rate of 7.5% at the end of the third quarter 2017, 7.0% at the end of the second quarter 2017, 7.1% at the end of the first quarter 2017, and 7.0% at the end of the fourth quarter 2016.
Class-C projects reported a vacancy rate of 5.6% at the end of the third quarter 2017, 5.7% at the end of second quarter 2017, 5.2% at the end of the first quarter 2017, and 4.7% at the end of the fourth quarter 2016.
The overall vacancy rate in New York City’s central business district at the end of the third quarter 2017 increased to 8.4%. The vacancy rate was 8.2% at the end of the second quarter 2017, 8.2% at the end of the first quarter 2017, and 8.6% at the end of the fourth quarter 2016.
The vacancy rate in the suburban markets increased to 8.2% in the third quarter 2017. The vacancy rate was 8.0% at the end of the second quarter 2017, 7.9% at the end of the first
quarter 2017, and 7.7% at the end of the fourth quarter 2016.