NYC Market Update: Development Increases YOY

Pandemic-induced uncertainty didn't entirely intimidate investors, as the market's under-construction office stock ticks up, according to CommercialEdge.

As of March, roughly 24 million square feet of office space was under construction in New York City, according to CommercialEdge. Most of these developments, amounting to 80 percent of the city’s total pipeline, are concentrated in Manhattan.

There were 19.2 million square feet of office space taking shape in Manhattan last month, 4 percent of total stock. The figures are slightly higher compared to last year’s 18.3 million and 3.8 percent, at the onset of the global health crisis. Despite historically depressed leasing activity, the year-over-year increase in under construction stock shows some signs of developer confidence in the long-term rebound of the market.

Seven projects in excess of 1 million square feet were rising in Manhattan as of March. The two largest towers, the 58-story 50 Hudson Yards and Tishman Speyer’s 66-story The Spiral both topped out in the beginning of the year, making Hudson Yards one of the hottest neighborhoods for development in the borough. Related Cos., Mitsui Fudosan America and Oxford Properties Group are behind the $3.8 million, Foster + Partners-designed skyscraper known as 50 Hudson Yards, with tenants like Facebook and BlackRock already locked in.

Brooklyn’s development pipeline inched up to 3 million square feet, a slight increase compared to the 2.5 million recorded in the same period in 2020. Nearly 80 percent of the borough’s current projects are slated for delivery by the end of 2021. JEMB Realty’s 1 Willoughby Square tower, one of the largest developments underway in Brooklyn, is also nearing completion. The first ground-up office project to rise in downtown for decades will offer 500,000 square feet across 34 stories.

In Queens, there were seven properties under construction as of March, amounting to a total of roughly 950,000 square feet. For each of The Bronx and Staten Island, the under construction pipeline was less than 500,000 square feet. CommercialEdge data showed all of the projects in the two boroughs planned for delivery by mid-2021.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here. We included properties of 25,000+ square feet in our research.

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