Development Set To Surge As Major Manhattan Skyscrapers Come Online

Robust job gains in New York City underpin substantial office construction. Supported by a wide range of industries and large corporations, office-using employment is advancing rapidly. Unemployment in the metro has fallen precipitously as a result, raising demand for office space. After several years of limited development, new projects will surge, underpinned by a metro vacancy rate below 11 percent. Development will rise to pre-recession levels, reaching above 8.8 million square feet and centered around massive projects, particularly in Brooklyn and Manhattan. While some softening will occur as tenant shuffling takes place, especially surrounding the biggest properties, long-term strength will remain in place as economic growth persists.

Deliveries focused on Manhattan and Brooklyn locations; speculative projects pick up. Operational strength throughout the metro will encourage the injection of several large projects this year, centered on locations in Manhattan and Brooklyn. In Manhattan, construction will be led by 55 Hudson Yards and 3 World Trade Center, combining for more than 4.4 million square feet. Outside Manhattan, Brooklyn will receive Dock 72 and 25 Kent Avenue, exceeding 1 million square feet. Activity outside the two boroughs remains limited, totaling less than 480,000 square feet.