{"id":1004080380,"date":"2013-07-18T10:37:36","date_gmt":"2013-07-18T18:37:36","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004080380"},"modified":"2022-12-03T17:36:50","modified_gmt":"2022-12-04T01:36:50","slug":"colliers-midyear-uneven-u-s-economy-worrisome-but-nyc-enjoys-banner-first-half","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/colliers-midyear-uneven-u-s-economy-worrisome-but-nyc-enjoys-banner-first-half\/","title":{"rendered":"Colliers: Midyear, Uneven U.S. Economy Worrisome, but NYC Enjoys Banner First Half"},"content":{"rendered":"<p><em>By Paul Rosta, Senior Editor<\/em><\/p>\n<div id=\"attachment_100407\" style=\"width: 190px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-100407\" data-attachment-id=\"1004070005\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/colliers-cw-manhattan-office-market-offers-tepid-but-promising-outlook\/joe-harbert\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg\" data-orig-size=\"336,336\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"Joe Harbert\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg?w=336\" class=\" wp-image-1004070005\" alt=\"Joe Harbert\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg\" width=\"180\" height=\"180\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg 336w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg?resize=150,150 150w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Joe-Harbert.jpg?resize=300,300 300w\" sizes=\"auto, (max-width: 180px) 100vw, 180px\" \/><\/a><p id=\"caption-attachment-100407\" class=\"wp-caption-text\">Joseph Harbert, president of Colliers\u2019 eastern region<\/p><\/div>\n<p>Halfway through 2013, New York City\u2019s office market continues to transcend the uneven national economy, even as economists limit their expectations for the rest of 2013. \u00a0That was among the insights offered Tuesday by Colliers International during a mid-year market briefing in Midtown Manhattan.<\/p>\n<p>\u201cThe recovery is not broad-based,\u201d said Peter Kozel, executive managing director &amp; chief economist for Colliers\u2019 tri-state region. \u201cIt\u2019s very concentrated in a few places.\u201d The energy sector is powering job growth in states like North Dakota, Texas, Alaska and Wyoming. Texas has single-handedly accounted for 13.8 percent of national employment growth since the beginning of 2011, even though it has only 8.1 percent of all employment. He expressed concern that the Federal Reserve\u2019s plan to wind down the monetary stimulus program known as quantitative easing will further hamper economy. Kozel also noted that the International Monetary Fund has revised its estimate of growth in global economic output down from 3.6 percent to 3.1 percent since the beginning of the year.<\/p>\n<p>For Manhattan, the outlook is considerably brighter. Total leasing for the first half hit 14.5 million square feet, suggesting that Manhattan is on a pace to beat last year\u2019s 23.8 million-square-foot total. Office leasing for the second quarter hit 9.6 million square feet, Manhattan\u2019s most productive period since the fourth quarter of 2009. In particular, \u201cThe month of April was a blockbuster month,\u201d said Joseph Harbert, president of Colliers\u2019 eastern region. In another piece of good news, about 80 percent of the activity this year reflects new leases. \u201cSublease space is only about 16 percent of the market,\u201d Harbert added. \u201cWhen it does come into the market, as it did at 299 Park (Ave.), it disappears overnight.\u201d<\/p>\n<p>On the pricing front, the average asking rent in Midtown North increased 1.7 percent to $66 per square foot during the second quarter, but Harbert pointed out an even more noteworthy trend: \u201cDeals over $100 per square foot have come back into the market.\u201d He attributed the return of premium pricing largely to hedge funds and private equity funds, the same deep-pocketed tenants who were willing to pay top dollar for trophy space before the recession.<\/p>\n<p>As it was last year, the sweet spot for leases is between 25,000 and 100,000 square feet. During the first half, 38 percent of leases-3.6 million square feet\u2014fell into that category. Moving up to second place, leases between 10,000 and 25,000 square feet made up 20 percent of the total. As often happens in Manhattan, the makeup of most active industries has evolved somewhat in the past year. Though financial services is still the single largest tenant category, accounting for about 20 percent of leasing so far this year, its share of Manhattan\u2019s leasing volume slipped from 30 percent in the first half of 2012. Legal services recorded the single biggest jump, from 2.6 percent at this point last year to an 11.7 percent share so far this year.<\/p>\n<p>Tenants in the hunt for Manhattan office space may face short-term challenges. Vacancy stands at 6.4 percent overall; Midtown South, smallest of Manhattan\u2019s three submarkets, ranks as the nation\u2019s tightest central business district, with a vacancy rate of 4.9 percent. Tenants able to look farther out will likely have more options, since Manhattan\u2019s availability rate is about 12.1 percent.<\/p>\n<p>Office Investment sales have slowed since mid-2012, as volume slipped $1 billion year over year to end the first half at $8.5 billion. As activity has slowed, prices have increased dramatically; the $9.5 billion worth of office sales last year represented 65 deals. During the first half, only 25 sales accounted for $8.5 billion in volume. Harbert and Colliers brokers suggested multiple reasons for the higher pricing: the pressure on investment managers to allocate capital to real estate, investor interest to repurposing office buildings to residential or hotel properties; capital made available by low interest rates; and continued investor confidence in Manhattan as the gold standard among office markets in the United States.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Halfway through 2013, New York City\u2019s office market continues to transcend the uneven national economy, even as economists limit their expectations for the rest of 2013.  <\/p>\n","protected":false},"author":445,"featured_media":1004070005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21784,21783,1600,21742,10,21747],"tags":[],"class_list":["post-1004080380","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brokerage","category-investment","category-new-york","category-latest","category-northeast","category-office"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - 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