NYC office rents could be eclipsed by D.C.

January 08, 2010 11:28AM

While New York City may be known for its pricey office space, that
paradigm could change soon. Washington, D.C. is inching closer to the
Big Apple in terms of price per square foot. The two cities have long-competed for the dubious title of most expensive city for office space, the Wall Street Journal reported, but rarely have the two been so closely neck-in-neck. While New York office
space’s price per square foot declined almost 20 percent
year-over-year, according to fourth-quarter data released by research
firm Reis, average rents in Washington dropped just 3 percent. In the
fourth quarter, New York City’s average office space rents hovered
around $45 per square foot in the fourth quarter, according to Reis,
while Washington rents were approximately $42 per square foot. The
disparity in office performance is based in large part on the two
cities’ divergent industries, according to Robert Bach, a chief
economist for Grubb & Ellis. “The financial crisis hit New York hard,
which is why it’s down so much, whereas the government is one of the
few sectors that has actually added jobs,” Bach said. This could lead
to an even tighter race between the two cities, price-wise, according
to Reis’ report. The firm estimates that Washington will actually
exceed the Big Apple in its average rent per square foot by about $.20
by the end of 2010.

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