Search
 

Downtown May See Conversions as Demand, Rents Slide

NEW YORK CITY-Cushman & Wakefield market analysts are predicting that much of Downtown's class B/C office space may be converted to residential, as property owners look to stay afloat in a market burdened under 13.6% total vacancy. A company office retrospective indicates class A asking rents in Lower Manhattan have dropped 13% during the past 12 months.

By Michael Gilliard | Updated on September 25, 2002

NEW YORK CITY-Property owners of class B/C office space Downtown may convert into residential to stay afloat amidst a 13.6% area vacancy rate, said Cushman & Wakefield research analysts during a recent conference call. Transactions are struggling to close at even 10% to 15% below already deflated asking rents. And class A vacancies have risen nearly 13% over the past 12 months leaving an even less attractive market for B/C office deals.

Early last September, Downtown’s class A vacancy rate sat at 3.7%. That figure is now 16.3% and shows little sign of abating soon, as leasing activity has slowed across all sectors considerably. The Cushman & Wakefield annual office retrospective shows 12.7 million sf of total space available Downtown.

Despite an unresponsive Downtown office market, the demand for residential space in Manhattan continues to increase. Nearly one quarter of all multifamily space in Manhattan was constructed after 1990, according a recent Marcus & Millichap Manhattan multifamily report on GlobeSt.com, and those rents continue to escalate.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.