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
Cove Property Group's Kevin Hoo and 441 Ninth Avenue (Cove Property Group)
Developer seeks $1B+ for West Side tower Hudson Commons
Developer seeks $1B+ for West Side tower Hudson Commons
Vice Media CEO Nancy Dubuc, Rudin Management's Bill Rudin and Dock 72 (Getty)
Vice plans move to Rudin’s Dock 72
Vice plans move to Rudin’s Dock 72
The attraction is now closed and the developer is conducting an investigation. (Getty)
Hudson Yards Vessel closed again after fourth death
Hudson Yards Vessel closed again after fourth death
Boston Properties CEO Owen Thomas (Thomas by Axel Dupeux, iStock)
Work-from-home threat “overstated,” Boston Properties CEO says
Work-from-home threat “overstated,” Boston Properties CEO says
The tenants who won the affordable housing lottery at 15 Hudson Yards say the units are in an “entirely separate part of the building and with a different address.” (Hudson Yards, District Court of New York)
Lawsuit claims 15 Hudson Yards discriminates with “poor doors”
Lawsuit claims 15 Hudson Yards discriminates with “poor doors”
arrow_forward_ios

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

Loading...