As New York City families pour into what were once almost exclusively commercial areas, the education sector has become a major player in Manhattan’s office-leasing market, the Wall Street Journal reported. Since 2005, the leasing footprint of the schools, universities and other educational services has increased 47 percent to 8.1 million square feet from just 5.5 million square feet as of November, according to CBRE data cited by the Journal.
The most significant area of educational-leasing activity has occurred in Midtown South and Lower Manhattan, which reflects the residential push into historically commercial neighborhoods.
“As far as our records go back, which is to the 1970s, there has never been an increase like this [in educational leasing], and it’s directly related to the increase in population growth and the increase in value of properties,” Bruce Surry, CBRE executive vice, who worked on the firm’s “Taking the Office Market to School” report, said.
Moreover, increased post-recession availability and lower asking rents in parts of Midtown South and downtown have also encouraged educators to expand their footprints, Surry told the Journal.”Prices will restrict and inhibit options for education tenants,” according to Mr. Surry. “And most schools sign 15- to 20-year leases.” [WSJ] —Christopher Cameron