Manhattan office construction on pace to hit 25-year high

Developers expected to build 9 million square feet over the next two years

New York /
Jun.June 16, 2014 04:55 PM

Manhattan will see office space increase by 9 million square feet in the three years between 2013 and 2015, according to a new report from the New York Building Congress. That would be the fastest pace of development since 1990.

Roughly two-thirds of that construction is slated for downtown, with the World Trade Center leading the way. In the following three years, the Building Congress expects developers to create another 10 million square feet. Between 2016 and 2018, 30 Hudson Yards, 1 Manhattan West, 2 and 3 World Trade Center will contribute significantly to the build-out.

The pace of construction will help drive growth in office space over the decade ending in 2019 to 24.4 million square feet. That compares with 19.4 million square feet in the preceding decade and 10.7 million square feet back in the 1990s.

But the office market does face some headwinds, Richard Anderson, Building Congress president, told Crain’s. While total office employment has hit a record 1.8 million jobs, more people are leaving offices than moving in. Industries that traditionally demand more space, such as finance, insurance and communications, are not adding as many jobs as those with smaller footprints.

Construction financing is also flowing less freely than it was during the boom years, a trend which favors experienced developers with greater equity and non-union builders.

New York City will need to continue adding about 20,000 jobs per year in order to maintain demand and prevent vacancy rates from creeping higher, according to the report. [Crain’s]Tom DiChristopher


Related Articles

arrow_forward_ios
Photo illustration of RXR Realty CEO Scott Rechler (Getty, iStock)
Office landlords offer no-wait Covid tests to lure workers back
Office landlords offer no-wait Covid tests to lure workers back
Rudin Management's Bill Rudin, 1675 Broadway and Gannett CEO Mike Reed (Getty, Google Maps, Gannett)
Gannett to move its NYC office two blocks north
Gannett to move its NYC office two blocks north
HSBC COO John Hinshaw (Getty, iStock)
HSBC to shrink its office footprint amid shift to WFH
HSBC to shrink its office footprint amid shift to WFH
Columbia Property Trust CEO Nelson Mills and renderings of 799 Broadway. (Columbia, 799 Broadway)
Columbia Property Trust’s rent collection stays steady in Q4
Columbia Property Trust’s rent collection stays steady in Q4
133 East Clarke Place (Google Maps, Getty)
Elevator mechanic killed at Bronx building
Elevator mechanic killed at Bronx building
Tony Malkin (Getty, iStock)
Empire State Realty Trust reports 97.5% drop in Q4 earnings
Empire State Realty Trust reports 97.5% drop in Q4 earnings
(iStock/Illustration by Kevin Rebong for The Real Deal)
Housing starts fall for first time since August
Housing starts fall for first time since August
(iStock)
Big companies delay returning to offices — again
Big companies delay returning to offices — again
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...