The desirability of the Meatpacking District (in part by fueled by Google’s move to 111 Eighth Avenue back in 2005 and its continued development of a “campus” in the micromarket) has encouraged developers to build boutique office buildings, which are commanding rents well above the market average. Opportunistic landlords are taking advantage of Meatpacking’s status as a trendy and hip place to be.
Six new developments—three complete and three impending, totaling 787,989 square feet—headline Meatpacking’s new supply. JLL Research reports that demand for new product has pushed Meatpacking’s starting rents 68.4% above the Manhattan average in 2017 after commanding just a 17.6% premium in 2014.
Historical average starting rents: Meatpacking vs. Manhattan
High demand and minimal supply—reflected in a 0.1% Class A vacancy rate in 2011—have stimulated developments, transforming the Meatpacking District into one of the most desirable office markets in the country.
New construction projects have attracted a diverse tenant mix to the historically creative Midtown South market. Asset managers Baker Brothers Investments, Tikehau Capital and RTW Investments, as well as insurance company Argo Group and real estate consulting group Delos Living, have all signed leases in new developments within the Meatpacking District.