The start of 2017 had all of the required elements for a market slowdown. A new president, a skeptical stock market, years of past real estate growth, and a teetering dollar. However, despite all of the predictors of a slowdown, New York City’s commercial real estate market has defied the odds.
According to a recent globest.com report, leasing activity in the first quarter of 2017 showed a two percent increase from its five-year quarterly average. This resulted in leases accounting for more than $6 million in the first three months of the year.
When compared to Q1 of last year, quarterly leasing activity is up almost 20 percent. Also, availability rate increased compared to Q4 of 2016 and 70 basis points from last year during the same quarter. This growth continues despite asking rents of $73.88 per square foot.
As a practical matter, workplace upgrades are also driving growth. Businesses crave locations that meet strategy goals and satisfy employees. Locations near quality restaurants, public transportation and retail centers check all of these categories. Businesses continue to look to lower Manhattan for these types of property. Spotify’s 387,000 square foot occupation of 4 World Trade Center was the largest deal of the quarter. With the largest tech relocation ever in downtown Manhattan, the move extends a trend where nearly 400 new tenants have moved from other markets to this part of the city.
Still, businesses must make good business choices when looking for spaces and negotiating leases. If you have questions about negotiating a commercial real estate lease, an experienced attorney can advise you.