Manhattan Office Pipeline Stuck, but Leasing Up

As of May, Manhattan’s office pipeline reached 20.6 million square feet, representing 4.2 percent of total stock, according to CommercialEdge data. No significant development milestones were reached that month across New York City’s boroughs, but landlords inked up several large office leases.

Nationwide, new supply growth is concentrated in rapidly expanding Sun Belt cities, such as Austin and Nashville, which are current leaders based on pipeline as a percentage of stock. Another cluster of development is fueled by the booming life sciences scene, led by Boston, which had the second highest office pipeline in the country after Manhattan, with 12 million square feet of new product underway as of May.

That same month, Jamestown announced that will invest $500 million in the redevelopment of One Times Square. Plans call for the modernization of the historic location of the New Year’s Eve Ball Drop into a modern NYC visitors center. The overhaul will include a new viewing deck and a Times Square Museum.

Manhattan’s office listing rate reached $72.9 in May, registering a 12.3 percent drop year-over-year—the largest fall across all markets. The metro’s total office vacancy stood at 14.1 percent that month, 330 basis points higher than at the same point last year.

Largest Manhattan office leases in May

Several notable lease transactions were signed in May, including a major consumer goods company’s 62,000-square-foot, full-floor commitment to 135 W. 50th St. in Midtown. Owned by UBS Realty Investors, the building recently underwent a thorough, $50 million overhaul.

That same month, Brookfield Properties signed an anchor tenant at its 660 Fifth Ave. property in the Plaza District. Australian financial services giant Macquarie Group signed up for 221,764 square feet at the location, where it will house its new U.S. regional headquarters.

Additionally, Tishman Speyer secured two office leases at The Spiral, one of the largest ongoing mixed-use towers under construction in Manhattan. NewYork-Presbyterian signed a 20-year lease to occupy 75,000 square feet at the 65-story skyscraper. International bank HSBC also committed to the supertall that month, with a 20-year, 265,000-square-foot lease. The new tenant will relocate its U.S. headquarters to the property, where it will occupy three floors.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.