Office space in New York may not be a bargain compared to Jersey City or Stamford, but compared to some world capitals, the Big Apple offers more bang for the buck.
Despite a global decline in high-end office rents, prices are still steep in the best parts of the best towns, according to Cushman & Wakefield s 2004 survey of global business space.
New York ranked fourth on the list at $84.82 a square foot, slightly more than half of rates in London, the world s most expensive city.
The study looked at rents in the most expensive areas of each city. In New York, that meant Midtown. In London, space goes for $164.70 a square foot in the posh Mayfair district.
Paris, at $105.78 a square foot, overtook Tokyo this year for the No. 2 spot. At $91.33 a square foot, Tokyo has fallen to the third-priciest slot. New York is number four, and proud.
“New York is highly competitive on the global stage, which makes it a great place to do business for international companies,” said Bruce Mosler, president of U.S. operations at Cushman & Wakefield.
“Generally speaking, rents have come down in New York,” said Robert Bach, national director of market analysis for Grubb & Ellis. But rents in Asian markets are even more depressed, he said.
The Cushman & Wakefield survey bears out that conclusion; Tokyo dropped down one place, Seoul fell from 11th to 13th and Hong Kong went from 12th to 17th.
“Some Asian markets were hit a bit harder – there has been more turmoil,” Bach said, referring to the Chinese takeover of Hong Kong and SARS, combined with the general worldwide economic downturn. “And Tokyo has been flat on its back for the last 10 years.”
But the Cushman & Wakefield report sees signs that the market is coming back – both here and abroad.
“The worst is behind us as the early signs of economic recovery and more upbeat business sentiment filter through to the world s key office markets,” said David Hutchings, head of research for Cushman & Wakefield s European operations.
Overall, rents fell by an average of 3 percent worldwide between 2003 and 2004, the survey found. That s an improvement from the 7 percent decrease the year before.
“As the business environment continues to improve, it will take time for rents to increase,” Hutchings said.
Research from Grubb & Ellis comes to the same upbeat conclusion. Its most recent global forecast said: “Most office markets around the globe have stabilized as 2003 draws to a close.”