A Tsunami Of New Office Space Is About To Hit The NYC Market

Despite a flurry of recent big leasing deals, NYC faces a challenge in filling the 24 million square feet of new space set to hit the market.

By Jeff Vasishta May 31, 2017

It’s good to know that at least the make-up industry is booming even if New York’s office market could need a touch up. MAC Cosmetics are moving their HQ’s to an 86,000 square foot space at Soho Square’s 233 Spring St. re-dubbed One Soho Square. Despite MAC’s bold move, New York City has more than enough office space to go around. In fact, much of it is destined to remain empty unless tenants start to materialize.

With an estimated 24 million square feet of office space due to hit the market in the upcoming months, recent big deals from MAC, a 98,000-square-foot lease by Deloitte at 1221 Sixth Ave in April and Sailthru’s 27,320 square feet lease at One World Trade Center, NYC still faces a gaping hole to fill when it comes to office space.

“The near future overriding ‘news’ is a net addition of 3.8 million square feet of available space that was added over the past 12 months,” Robert Shapiro of Newmark Grubb Knight Frank said to the NY Post.

Related: Geek Alert—Zillow Announces $1 Million Competition To Best Its Tech Team

According to Newmark, there has been an increasing surplus of office space for most of the last twelve months with availability rising to 12.8 percent by the end of April from this time last year. Manhattan asking rents were stable at $76.20 a foot.

Competition for Manhattan space comes from revamped warehouses and older office buildings in Brooklyn and Queens luring the tech industry. Still, commercial real estate brokers are putting a positive spin on Manhattan’s ability to keep it offices filled.

“You are seeing concession packages going up, and that is where the adjustment is taking place,” Kaufman Organization principal Grant Greenspan told the Post. “It could turn around on a dime,” he says, stating that uncertainty over health care and taxes are keeping tenants skittish. “It’s more psychological than the fundamentals.”

Related: Developers Jump Aboard The Trend To Revamp Transit Hubs And Remake Cities

It’s a sentiment that Bruce Mosler, head of global services at Cushman & Wakefield agrees with. “For seven years running, New York has outpaced the US for job growth,” he says. “We are looking at extending this cycle, and while nobody knows for how long, in particular in the financial-service sector, it bodes well for New York.”

According to a recent office market report in Optimal Spaces, new office leasing has been slow but Manhattan hasn’t been monolithic. Downtown had a dramatic increase, with 1.87 million square feet leased, 286 percent above last quarter and 45 percent above the five-year average. Downtown Manhattan’s office market has its best quarter in two years, led by big leases like Spotify’s 378,000-square-foot deal at Four World Trade Center. In Midtown South activity has generally been strong with asking rents up 11.7 percent to $76.65/RSF. Downtown rents dipped 2.2 percent to $56.45 per square foot.

How the market will deal with upcoming influx of new space is up for debate. Certainly there is a demand but whether it is enough remains to be seen.

“The market is full of speculation as to when this current cycle will end,” Colliers executive director Craig Caggiano to The Real Deal. “First quarter numbers showed a continuation of a healthy market.”

Jeff Vasishta



Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

    Do you know how the so-called “affordable” real estate in New York is getting less affordable by the day whereas the city’s luxury market is softening? #luxury #condo
    One of the most iconic buildings in Boston has officially been sold and hopefully, the iconic station will be upgraded. #Boston #SouthStation
    This week, three of the apartments in the starchitect-designed West Chelsea condo have hit the rental market. #zahahadid #chelsea
The Most Walkable City In The United States Is NYC
It’s no surprise that New York City is the most walkable city in the United States. Everything in the Big Apple makes it the ideal…
10 Booming Cities In The United States Where Homes Are Still Affordable
In most of the United States, buying a house is getting more and more pricey.  The main factor behind this scenario can be explained or…
New Rentals At Zaha Hadid’s West Chelsea Condo Hit The Market
Living NYC’s newly developed condo buildings is a privilege reserved strictly for the well-heeled. This is especially true when the condo tower in question has…
Can We Go Higher? NYC’s Costliest Condos Are Getting Even More Expensive
Do you know how the so-called “affordable” real estate in New York is getting less affordable by the day whereas the city’s luxury market is…
The Iconic Plaza Hotel In New York City Is Looking For Buyers
One of New York City’s most iconic properties could be having new owners very soon. The Indian business conglomerate, Sahara Group, has hired a broker…
A New 20,000-Square-Foot Megamansion Might Be Coming To Manhattan’s Greenwich Village
For the filthy rich living in the heart of Manhattan, condos in glassy towers seem to be the most common option these days. Lavish pads…
New Retail Strip Is Coming To Astoria Area With A Troubled Past
It seems like a bad coincidence, but the Dutch Kill neighborhood, located in otherwise prosperous Astoria, did manage to live up to its, ahem, colorful…
UN New York Hotel To Rebrand As Millennium Hilton New York One UN Plaza
The United Nations Plaza complex is an iconic landmark in Manhattan. It is a key property located across from the United Nations Headquarters that is…