Q4 2022 Office Space Report: New York, NY
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
New York City is home to several major company headquarters, including those of J.P. Morgan Chase, Pfizer, and New York Life Insurance, but continues to suffer from large amounts of vacant office space.
The unemployment rate for the city reached 5.1% in December 2022. The population reached 18.8 million for the metro area in 2022.
In Q4, New York City’s office space market saw declining leasing activity, rising vacancies, and mild increases in rental rates.
General Area Overview & Demographics
New York City has a diverse population consisting of African Americans, Hispanics/Latinos (27%), Whites (44%), and Asians (14%). The majority of New York City’s population lives in the five boroughs: Manhattan (1.6 million), Brooklyn (2.6 million), Queens (2.3 million), Bronx (1.4 million), and Staten Island (477,000).
New York City Median Household Income & Population
The median household income in New York City is $63,000. However, there is a large disparity between the incomes of different neighborhoods. In Manhattan, the median household income is much higher at $96,000 while in the Bronx it is significantly lower at just $33,000.
New York City is home to a young population. 33% of its residents are between the ages of 18 and 34 followed by those aged 35-49 (27%) and 50-64 (20%). The city also has a large senior population, with 10% of its residents aged 65 and over. The median age is 37 years old.
Columbia University, New York University, and The City University of New York are located in New York. The city is also home to Columbia Law School, Cornell’s Medical School, and NYU Stern Business School. There are over 200 community colleges and trade schools in the city.
New York City is home to world-famous attractions such as the Empire State Building, Central Park, and the Statue of Liberty. Visitors can also explore the city’s many museums and other popular attractions including Times Square, Broadway shows, and the High Line.
Summer temperatures typically range from the mid-70s Fahrenheit to the upper 80s while winter temperatures stay in the 30s and 40s. The city is prone to snowstorms during the winter months and occasional thunderstorms during the spring and summer months.
Summary of New York Office Space Performance in Q4 2022
The overall vacancy rate in the Manhattan borough reached 15.4% in Q4. Brooklyn’s availability rate reached 21.1%.
Manhattan’s net absorption reached -1.54 million square feet in the quarter, while Brooklyn’s absorption barely surpassed 1,000 at 949 square feet.
What are office space rents like in New York?
The average asking rent for Manhattan office space was $77.24 per square foot, about a 1.8% increase from Q3 2022’s rate.
Brooklyn’s asking rent was $50.43 per square foot. Asking rents for Class A office space in the Brooklyn borough decreased to $59.36 per square foot in Q4 2022.
Purchase & Leasing Activity
Leasing activity in Manhattan was at 4.42 million square feet, bringing the total for the year to 23.21 million square feet for the borough.
Brooklyn’s leasing activity was at 183,990 square feet in Q4 which was a 30% decrease quarter-over-quarter.
Notable Office Space Deals in New York in Q4 2022
There were several notable deals that took place for New York City office space in Q4 2022:
- U.S. General Services leased 51,891 square feet in Brooklyn.
- Mindspace leased 37,403 square feet in Brooklyn.
- Stifel Financial Group leased 214,706 square feet in Manhattan.
- Ann Inc. leased 191,258 square feet in Manhattan.
These are select examples among other activity.
New Office Space Development Activity in New York in Q4 2022
3.82 million square feet in the pipeline across two new construction projects are expected to be delivered between 2023 and 2024 in midtown Manhattan.
Both of these projects are 88% pre-leased.
Market Forecast for New York City’s Office Space Market
For Manhattan, availability rate, net absorption, and leasing activity all decreased year-over-year in Q4 while rents saw an increase of about a dollar more per square foot.
For Brooklyn, leasing activity and net absorption decreased year-over-year in Q4 while rents saw a slight increase.
The market may face a threat of continued decline if trends remain the same throughout 2023.
Takeaways for Office Space Investors
The decrease in leasing activity across two of New York’s major boroughs may be a negative indicator moving into the new year.
Rents continue to remain relatively stable but, with waning absorption, could see an increase in the year to come.
Do your research, stay diligent, and happy investing.
Find & Connect With Commercial Agents & Brokers in New York, NY for Free on MyEListing.com
MyEListing.com maintains one of the largest databases of commercial agents & brokers in the country. Use it for free to find & connect with commercial agents & brokers in New York, NY.
Other recent articles
Article Search
Share
All Article Categories
