Office supply surge slowing down rent growth: Owen Thomas

Boston Properties CEO riffs on impact of Hudson Yards and World Trade Center

New York /
Oct.October 26, 2016 12:20 PM

A surge in new supply in Manhattan’s office market is starting to make a dent on rents, Boston Properties CEO Owen Thomas said during an earnings call Wednesday.

“We see availability in New York, it’s hard to push it below 10 percent and in an environment like that it’s hard to push rents – certainly above inflation,” Thomas said, although he added that he considers the office market healthy amid broad-based job growth. “I think the mix of industries is getting more diverse in a positive way.”

The real estate investment trust’s president Douglas Linde said that a growing number of landlords are offering tenants concessions in the form of buildouts and flexible lease start dates.

Boston Properties TRData LogoTINY owns several Manhattan office towers, including the GM Building, and is currently developing an office building in the Brooklyn Navy Yard in partnership with Rudin Management and WeWork.

The company’s net income fell to $76.8 million in the third quarter, down from $181.4 million a year ago, which the company attributed in part to accelerated depreciation expenses on Its Office Building 601 Lexington Avenue.

On SL Green Realty’s earnings call last week, the company’s CEO Marc Holliday dismissed the suggestion that the surge in new supply through megadevelopments at Hudson Yards and the World Trade Center could push down rents, calling the projects a “good thing” for the market.


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)
Hudson Yards megadevelopment inspires a new line of sex toys
Hudson Yards megadevelopment inspires a new line of sex toys
The Observation Deck at Hudson Yards (Credit: Adam Pogoff)
Views from 1,100 feet: A tour of Related’s “the edge,” the tallest outdoor observation deck in the Western Hemisphere
Views from 1,100 feet: A tour of Related’s “the edge,” the tallest outdoor observation deck in the Western Hemisphere
Facebook CEO Mark Zuckerberg and Hudson Yards (Credit: Getty Images and Wikipedia)
Facebook close to finalizing Hudson Yards office deal: report
Facebook close to finalizing Hudson Yards office deal: report
Vornado Realty Trust’s Steve Roth,  Daryl Roth and Related Companies CEO Stephen Ross (Getty)
Steven Roth’s wife bets $500K on McGuire for mayor
Steven Roth’s wife bets $500K on McGuire for mayor
Marble Ridge Capital LP’s Dan Kamensky and Neiman Marcus at Hudson Yards in New York (Getty; Jewish National Fund)
Hedge fund manager pleads guilty to fraud in Neiman Marcus bankruptcy
Hedge fund manager pleads guilty to fraud in Neiman Marcus bankruptcy
 Boston Properties president Doug Linde with Dock 72. (Beth Israel Lahey, Dock 72)
Boston Properties gives dim outlook on co-working
Boston Properties gives dim outlook on co-working
Gotham's Joel Picket and David Picket with 538 10th Ave. (Google Maps)
Gotham plans massive mixed-use building on Far West Side
Gotham plans massive mixed-use building on Far West Side
The Vessel at Hudson Yards (Getty)
Related closes Vessel after third suicide
Related closes Vessel after third suicide
arrow_forward_ios

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

Loading...