Leasing impressive despite financial markets downturn.
Leasing activity in the Midtown South market, for example, has surged by more than three percent in the first eight months of the year alone, reaching 2.38 million square feet. As a result, availabilities have dropped dramatically in this market, which now boasts an availability rate of just 4.5 percent.
One submarket in particular, Hudson square, has experienced tremendous leasing activity over the past eight months, as a number of high-profile firms have leased space in the area. This strong demand for office space has led to a significant reduction in this submarket's availability rate, which now stands at 4.3 percent - an all time low for Hudson square.
As more and more companies discover Hudson square, many property owners are now looking to renovate and upgrade existing properties to satiate increased demand. Trinity Real Estate, one of New York City's largest and oldest landlords with over six million square feet currently under ownership, for example, is in the process of converting a number of the properties in its portfolio to office use, taking full advantage of a revitalized Hudson square market. This push to renovate and upgrade existing properties is further testament to the market's continued strength.
One reason for the market's prosperity has been the lack of major new construction. Unlike the building spree that occurred in the 1980's, developers have kept new construction to manageable levels. As a result, office supply remains extremely tight. For the remainder of the year, the future looks bright, and the office leasing market should continue to post good numbers across the board despite a further slowdown in investment activity.
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|Title Annotation:||Third Quarter Review; office building leasing in Manhattan, New York, New York|
|Publication:||Real Estate Weekly|
|Date:||Oct 7, 1998|
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