{"id":1004605146,"date":"2022-11-03T06:48:50","date_gmt":"2022-11-03T14:48:50","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004605146"},"modified":"2022-12-09T00:53:29","modified_gmt":"2022-12-09T08:53:29","slug":"market-update-is-nycs-recovery-underway","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/market-update-is-nycs-recovery-underway\/","title":{"rendered":"Market Update: Is NYC’s Recovery Underway?"},"content":{"rendered":"

\"\"<\/a>Since the effects of the global health crisis started to settle, all eyes have been on New York City\u2019s office market and its road to recovery. However, numbers have been shy to point towards a definite recovery so far. Based on CommercialEdge data, we have compiled the freshest numbers to give you the current fundamentals of the largest office market in the country.<\/p>\n

Manhattan\u2019s under-construction office stock in September reached 25.1 million square feet, with 27 office properties in the making\u2014representing 5.3 percent of total stock. The nation\u2019s development pipeline hit 7.8 million square feet that month, corresponding to 2.5 percent of total stock.<\/p>\n

The borough’s current pipeline is still sustained by large-scale projects that started to go vertical before the pandemic hit. Three of the top 5 largest office developments currently in the making have deliveries planned by the end of 2022, including Tishman Speyer\u2019s 2.8 million-square-foot The Spiral<\/a>\u2014currently the biggest office property under construction in the metro.<\/p>\n

Manhattan is still the gateway market with the largest under-construction pipeline, followed by Boston (16.1 million square feet) and Seattle (12.4 million square feet). Three years ago, some of these now best-performing cities have not made it to the top, but the life science sector\u2019s ongoing boom has propelled them into the lead.<\/p>\n

New office development lags<\/h2>\n

Construction starts during the first nine months of the year reached merely 715,124 square feet in Manhattan, and included three properties. By comparison, in the same period in 2021, five buildings totaling 2.2 million square feet commenced construction.<\/p>\n

In the first quarter of the year, excavation work begun on 520 Fifth Ave., the mixed-use project to break ground in 2022 in the metro. Rabina Properties <\/strong>is the developer behind the 450,000-square-foot, Kohn Pedersen Fox<\/strong>-designed tower. The property will offer luxury residences, boutique offices and retail.<\/p>\n

\"425<\/a>

425 Park Avenue. Image courtesy of Alan Schindler<\/p><\/div>\n

The largest building that came online year-to-date through September was 425 Park Ave., with developers L&L Holding<\/strong>, Tokyu Land Corp.<\/strong> and BentallGreenOak<\/strong> receiving a temporary certificate of occupancy<\/a> in January 2021. The Norman Foster<\/strong>-designed landmark rises 47 stories in the Plaza District and offers roughly 670,000 square feet of leasable office space. The tower represents the first full-building structure along Park Avenue to rise in half a century.<\/p>\n

The second largest project that was completed so far this year was Kl\u00f6vern<\/strong> and GDS Development Management\u2019s <\/strong>1245 Broadway in NoMad. Designed by Skidmore, Owings & Merrill<\/strong>, the 23-story property features 190,000 square feet of leasable space. In October 2021, film and television studio A24 Films signed a 41,000-square-foot lease<\/a> at the property.<\/p>\n

Manhattan office vacancy widens YOY, but there\u2019s a silver lining<\/h2>\n

The metro\u2019s office vacancy hit 13.8 percent in September, outperforming the national average of 14.5 percent that month. Manhattan\u2019s office vacancy registered a drop<\/a> in the second and third quarters compared to the first three month of 2022, with lease signings accelerating in 2022\u2014but the borough\u2019s occupancy has still a long way to go.<\/p>\n

Los Angeles (12.3 percent), Miami (10.2 percent) and Boston (7.5 percent) had lower vacancies than Manhattan, while the other peer markets registered higher rates: Seattle (16.4 percent), San Francisco (17.6 percent) and Chicago (18.1 percent).<\/p>\n

Here are some of the biggest Manhattan leases of the year:<\/p>\n