New York has always been one of the strongest markets for office furniture, and if the forecast is correct, it will remain so well into the future.
- Manhattan will see 12.6 million square feet of new office space become available over the next two years, the most of any two-year period since 1985 and 1986, according to the Commercial Observer's analysis of data provided by Cushman & Wakefield.
- More than 7 million square feet of that space has been leased, but 22.1 million square feet will come online during the next five years, and almost 14 million square feet of that is still available. Megadevelopments like Hudson Yards are driving the large influx of new square footage.
- New construction space is leasing for 27.5% more than existing Class A office space, which is putting downward pressure on rents for space in older buildings. That trend will likely force landlords to continue offering concessions and other enticements in order to draw in future tenants.
The tech sector is contributing to the increase in the amount of new office space in Manhattan, namely its Midtown South area. In a Mortgage Professional America analysis of Cushman Wakefield data, Midtown South came in at a low vacancy rate of 6.9%, followed by Seattle (7.3%), Charlotte, NC (8%) and Raleigh/Durham, NC (8.1%).
But Manhattan isn't the only New York City borough building its inventory of new office space. Tishman Speyer is building a 10-story office building on top of the historic Macy's department store in Brooklyn. Dubbed The Wheeler, the project will add about 620,000 square feet of new space over Macy's and developers will tie that into two existing neighboring 10-story office buildings. The project is expected to be completed in 2019.
Steiner NYC also filed plans to expand Brooklyn's creative office space with a nine-story addition to the Brooklyn Navy Yard campus according to Curbed New York. The first four floors will be dedicated to parking space, and the next four will have room for light manufacturing. The top floor will host the additional office space.
Developer Nicotra Group also broke ground on Corporate Commons Three on Staten Island in September. The new eight-story, 330,000-square-foot office building, according to Staten Island Real-Time News, will be LEED certified and is an addition to the two existing buildings at the Corporate Park of Staten Island. Nicotra Group estimates the project to be complete in 2019.