Major themes for the year included the migration of large tenants to Lower Manhattan, record leasing activity in Midtown South and the continued rise of Midtown’s Trophy properties as both international investors and tenants take interest.
Manhattan’s overall vacancy rate dropped to 9.5 percent this quarter, a decrease of 2.1 percent (or 0.2 percentage points) from 9.7 percent in the third quarter of 2014 and 14.4 percent (or 1.6 percentage points) from 11.1 percent at year-end 2013. The Class A vacancy rate declined to 10.5 percent in the final quarter of the year, a decrease of less than 1.0 percent from 10.6 percent in the third quarter of 2014. New York’s Class A vacancy rate dropped 13.2 percent (or 1.6 percentage points) from 12.1 percent at year-end 2013.
“The outlook for the financial services sector — historically a key driver in terms of the city’s Class A office leasing activity — is improving,” said Tristan Ashby, Director of New York research.
“While the industry has not yet recovered all the jobs lost since the recession, the sector posted noticeable year-over-year employment gains throughout 2014. Despite increased regulation, the uptick in financial services employment is forecast to continue, as lingering reluctance to expand hiring wanes in light of improving economic indicators. Sustained employment growth in the sector would have an outsized effect on the Manhattan office market and future leasing activity.”
For more commentary about the Manhattan office market in 2014, including specific vacancy and leasing activity for Midtown, Midtown South and Downtown, click here.
For even more intelligence, check out JLL’s Q4 2014 New York Office Outlook.