Growth in NYC office supply is “a good thing”: Marc Holliday

SL Green CEO dismisses glut fears

New York /
Oct.October 20, 2016 05:30 PM

With millions of square feet in new office space being built at Hudson Yards and the World Trade Center complex, some market observers are warning of a supply glut. But Manhattan’s largest office landlord, SL Green Realty, is having none of that.

“The addition of new supply to Manhattan is a good thing,” the company’s CEO Marc Holliday said during an earnings call Thursday. He argued that office construction is a reflection of growing demand, rather than a precursor of falling rents.

SL Green TRData LogoTINY estimates that new construction in Manhattan is adding 2.5 to 2.75 million square feet in new office inventory annually over the coming years, which Holliday called “modest.”

“The issue is not the inventory to me, it’s the job growth,” he said. As long as the city adds around 10,000 office-using jobs per year, he argued, the new supply will be absorbed. “I have no real concern that we won’t be able to maintain a high occupancy rate.”

Between 2010 and 2015, annual growth in the number of office-based jobs in New York City averaged 31,600, according to a July report by the City Planning Commission. Between the first quarters of 2010 and 2016, Manhattan’s office vacancy rate fell from 12.7 to 10 percent, according to JLL.

On Wednesday, SL Green announced that it had sold a 49 percent stake in a 19-story office building at 400 East 57th Street to asset manager BlackRock.


Related Articles

arrow_forward_ios
The Daily News Building at 220 East 42nd Street and SL Green CEO Marc Holliday (Credit: Getty Images)
SL Green puts Daily News building up for sale
SL Green puts Daily News building up for sale
SL Green snags private-equity firm at One Vanderbilt
SL Green snags private-equity firm at One Vanderbilt
SL Green snags private-equity firm at One Vanderbilt
SL Green’s locks in big bank lease at Hudson Yards redevelopment site
SL Green’s locks in big bank lease at
Hudson Yards redevelopment site
SL Green’s locks in big bank lease at
Hudson Yards redevelopment site
Boston Properties CEO Owen Thomas and 343 Madison Avenue (Boston Properties, Getty Images)
Boston Properties plans 1M sf tower at ex-MTA HQ
Boston Properties plans 1M sf tower at ex-MTA HQ
 SL Green’s Marc Holliday with 450 Park Avenue  (Taconic Partners, SL Green)
TRD Pro: Here are NYC’s biggest offices sales of Q2
TRD Pro: Here are NYC’s biggest offices sales of Q2
Paycheck potential: A look at real estate’s top earners
Paycheck potential: A look at real estate’s top earners
Paycheck potential: A look at real estate’s top earners
Vornado ceo Steven Roth and One Penn Plaza (Illustration by Kevin Cifuentes for The Real Deal with Getty Images, Vornado Realty Trust)
Vornado’s Roth sees “choppy” market, chides Penn skeptics
Vornado’s Roth sees “choppy” market, chides Penn skeptics
Steven Roth, Aby Rosen, and Albert Behler (Illustration by The Real Deal with Getty Images)
Manhattan office leasing has best month since pandemic hit
Manhattan office leasing has best month since pandemic hit
arrow_forward_ios

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

Loading...