GlobeSt.com SPECIAL REPORT: Midtown Building Mini-Boom Won't Relieve Tight New York City Market

NEW YORK CITY- While construction crews Downtown work around the clock at the World Trade Center site clearing away the rubble, building continues daily throughout Midtown Manhattan. Nearly 16 million sf of new projects are either underway or in the planning stages, but this new office space is mostly already leased and won’t help replace the 13 million sf Downtown destroyed by the Sept 11 terrorist attacks.

This new construction wasn’t forecast to have a major impact on increasing supply even before the destruction of the World Trade Center towers. Of the eight new buildings now under construction in Midtown, 87% of the 7.6 million sf currently being built is already pre-leased according to Grubb & Ellis. Preliminary site work now underway at three other Midtown projects will one day produce another 3.7 million feet, but 70% of that space is already spoken for, leaving only about one million sf of new space from those three projects available to meet demand.

“A huge part of the space that is under construction is already committed,” says Ray O’Keefe, executive managing director and regional managing director of Grubb & Ellis. “There are only three million to four million sf available. While some may view the building that is underway as speculative, it’s not, because most often there are tenants committed.”