Monthly Archives: October 2014

Betting on the boroughs

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The Bronx: New York’s hippest office market

The following post was written by Megan Dolan and originally appeared as a Featured News Special on JLL’s Commercial Real Estate News Hub

Just over a month ago in New York, a former industrial warehouse turned loft-like office space with 93 percent occupancy sold for $114 million. See if you can guess where the building is located:

  1. Soho
  2. Tribeca
  3. Brooklyn
  4. The Bronx

If you guessed 4) you got lucky, were involved in the transaction or are keenly aware of New York’s hippest new office market. The sale of the landmarked BankNote building, at 890 Garrison Avenue in the Bronx’s Hunts Point neighborhood, is perhaps the most eye-catching deal in a borough that’s rife with redevelopment.

According to The Real Deal, Bronx saw $1.3 billion in real-estate deals in 2013 and another $895 million invested in real estate and development, an increase of nearly 33 percent since 2010.

Similar to the fashionable locations in Brooklyn and Queens, much of the capital in The Bronx went to convert the industrial properties that dominate the landscape into residential, retail and office space that investors are betting will yield superior returns to traditional investment submarkets in New York City.

Yields in the Bronx and other boroughs are in the five to six percent range — as much as 100 basis points over typical Manhattan returns.

“Manhattan will always be in the conversation about top real estate markets, but investors are a bit frustrated with the growing global demand relative to opportunities in Manhattan,” says JLL Vice Chairman Scott Latham.

“Investors are expanding their reach to Brooklyn, Queens and the Bronx, seeking growth corridors at a more attractive basis.”

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What’s going on in New York City?

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TAMI leasing activity surges… and other Q3 insights from NYC

NYCIn our latest report, New York Office Insight, JLL highlights some of the more interesting trends we are seeing take shape across the New York office market, with specific emphasis on happenings as seen at the end of the third quarter.

New leases drive YTD activity
As opposed to the… Read More

What “time” is it in your market?

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U.S. Office Property Clock – Q3 2014

The JLL U.S. office property clock demonstrates where each market sits within its real estate cycle. Markets generally move clockwise around the clock; geographies on the left side of the clock are generally landlord-favorable, while markets on the right side of the clock are typically tenant-favorable.

Click on the clock below to be taken to our interactive site, which maps the current (Q3) position of major markets around the United… Read More

Every building tells a story and every project inspires a solution

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See what’s possible…

Check out the video below to see what is trending and how JLL’s project and development services team has collaborated with clients to create inspirational spaces.

With over 60+ projects included, from hotel renovations to a museum exhibit installation, our project management team closely works with each client to make each program a success.

See what’s possible: http://www.us.jll.com/pdsbook

 … Read More

Are real estate markets reconnecting?

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Colin Dyer, JLL President and CEO, and LinkedIn Influencer, on why leasing and investment markets are reconnecting across the world 

The below post was originally shared on LinkedIn by Colin Dyer.

Dyer, ColinA year ago, I wrote about the disconnect between commercial real estate investment and office leasing markets around the world, as investment sales surged while leasing volumes remained stalled. But I also said, “The good news is that there’s good reason for greater optimism next year…Business and consumer confidence should improve, and strong corporate balance sheets will support new capital expenditures.”

That, in fact, has been the case in 2014. Big corporate tenants were struggling with low revenue growth last year. That made them cautious, and many postponed occupancy decisions to focus on cost cutting and productivity measures. Today they are demonstrating greater confidence, and with it, greater willingness to spend and implement longer-term real estate strategies. As of mid-2014, global office net absorption was up 15 percent on the year before. Investment volumes increased 21 percent during the same period.

Why the new life on leasing?

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U.S. office market experiences tightest fundamentals of last eight years

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Following from the recent release of JLL’s Q3 U.S. Office Outlook, in the video below, JLL’s Managing Director of U.S. office market research, John Sikaitis, discusses the state of the national office market and expectations for the coming months, as of October 2014.



Download your copy of the Q3 2014 U.S. Office Outlook for a complete market review.… Read More

U.S. office sector posts lowest vacancy rate of the recovery

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JLL has released its Q3 2014 United States Office Outlook

Q3USreport_blogOverall, the outlook for the U.S. economy is positive, with businesses continuing to invest more in people and products. Economic momentum is picking up, and tenants are continuing to expand.

On the investment sales side, activity is up 38 percent year-to-date, and investment profiles diversified. Most of the large deal flow was heavily concentrated in New York City… Read More

Tech venture capital funding surges in August

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JLL NYC Research: September Tech Monthly

High-tech_blogJLL’s Tech Monthly looks at activity in New York’s tech sector, including employment growth, leasing activity, venture capital funding and companies hiring.

Key takeaways from our September report include:

  • Employment in New York City’s technology sector increased by 3.8 percent year-over-year through August, though the rate of growth has dipped slightly.
  • Tech venture capital funding surged, totaling $627.1 million in raised capital (an increase
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Employment: Many industries are reaping the benefits of improving market fundamentals

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NYC Office Employment Update: September 2014

Employment_blogJLL’s monthly office employment update covers key employment statistics and trends, and the subsequent implications for real estate.

Highlights from the September update include:

  • The city’s unemployment rate fell to 7.3 percent in August from 7.8 in July, the lowest level since 2008.
  • Employment, however, increased marginally by 4,700 payrolls in August when seasonally adjusted, indicative of the summer slowdown.
  • The private sector
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New York office market posts lowest overall vacancy rate since Q3 2008

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  • Vacancy rates down in all submarkets, building classes
  • Overall Manhattan rents continue to rise in 3rd quarter of 2014

NYC_blogDespite moderate leasing activity during the third quarter of 2014, New York’s office market posted sharp drops in vacancy rates in every submarket and property type, according to JLL. The city’s overall vacancy rate has fallen to its lowest level since the third quarter of 2008.

Manhattan’s overall vacancy rate dropped to 9.7 percent this quarter, a decrease of 8.5 percent (or 0.9 percentage points) from 10.6 percent at midyear 2014. The city’s Class A vacancy rate fell to 10.6 percent in the third quarter of 2014, a decrease of 7.8 percent (or 0.9 percentage points) from 11.5 percent the previous quarter.

“The final quarter of the year is typically the most active in Manhattan, and brokers reported brisk building touring activity over the summer,” said Tristan Ashby, director of New York research.

“Going forward, we expect to see much higher rents throughout the city as vacancy rates continue to tighten. There are increasingly fewer opportunities at the very top end (Plaza Trophy) and very low end (Downtown Class B) of the market, or anywhere in Midtown South. Longer-term, large blocks will begin entering the market in Midtown beginning in 2018 as new construction, redevelopments and several large blocks vacated by relocating tenants come online.”

Overall average asking rents in New York rose to $64.91 per square foot this quarter, an increase of less than one percent from $64.57 per square foot at midyear 2014. The city’s Class A average asking rent grew to $71.66 per square foot in the third quarter of 2014, an increase of less than one percent from $71.28 per square foot the previous quarter.

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