‘Little Bright Spots’Īll this is taking a toll on construction. Vornado is down about the same amount to $34. SL Green shares have fallen 48% to $47 a share. Investors have lost confidence in New York real estate’s future as the city’s two largest publicly held have seen their stocks plummet. The amount of sublease space is almost certain to force declines in rents soon, Mangru said.
Office space in time warner building free#
But that is because landlords say that there is no reason to lower their asking rents since so few companies are actually looking for space.Įffective rents, though, have slid with building owners offering more concessions, such as free rent and rebates for the cost of renovating interiors. “There is uncertainty on the long term.”ĬBRE’s most recent report shows the average asking rent remained virtually unchanged from a year ago at $79 per square foot annually. “The pandemic is keeping a lid on the market with a lot of office workers who are not in their offices,” said Nicole LaRusso, director of research at the real estate firm CBRE. Business leaders estimate about 15% of workers have returned to offices in recent weeks. 30 - down 50% from the five-year average for the period.
In all, only 2.57 million square feet of space were leased in Manhattan between July 1 and Sept. There’s also been an uptick in sublease space from the financial services sector. Media companies are trying to shed the most space as the pandemic shakes up an already vulnerable sector, Mangru said. While office markets are expanding in Brooklyn and Queens, they are a small fraction of the space in Manhattan and are not tracked closely. Manhattan boasts more than 400 million square feet of office space and those buildings provide 10% of all the city’s $60 billion in tax revenue, as well as housing the companies and workers that propel much of the city’s economy. Small-business revenues are down 40%, compared to a little over 20% nationally. Google mobility data tracing movement by people on transit, shopping and other travels shows activity down 40% in New York compared with the average of the first two months of the year, representing the biggest drop in the country, according to the report.Ĭonsumer spending in the city has fallen 6.3%, a drop 4 percentage points deeper than the national average. The national jobless rate in September was 7.9%Ī report last week from the investment banking firm Goldman Sachs using new data indicated New York is among the hardest-hit cities in the country. The city added a disappointing 41,000 jobs, putting the loss since the record 4.7 million posts logged in February at 648,000. Members and sponsors make THE CITY possible. The unemployment rate in the city in September fell to 14.1% from 16.3% in August. The changing state of the office market comes as the latest pulse-taking on the New York economy shows the recovery from the pandemic shutdown has slowed. “Companies are conserving cash, the technology sector is leaning into work from home and companies are reassessing things,” said Danny Mangru, tri-state research director for Savills. That record appears likely to be broken before the pandemic anniversary in March, says a new report from researchers at the real estate firm Savills, marking a sign of how the coronavirus crisis has shaken the city’s crucial commercial real estate sector.Īfter a 50% increase in recent months, sublease space in Manhattan now exceeds 16 million square feet and is approaching half of all the office space for lease.
By mid-2002, the amount of sublease space available in Manhattan hit a record high 17.5 million square feet. In the aftermath of 9/11, New York City companies put millions of square feet of office space up for rent even though they had years left on their leases.
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