Office Market Still Strong; Future Uncertain

NEW YORK CITY-Available office space here is approaching its lowest level in nearly seven years. So said Cushman & Wakefield at its Tuesday morning year-end report presentation. Total available office space in Manhattan measured 22.2 million sf at the end of 2007, down from 26 million sf at the end of 2006 and the lowest since the beginning of 2001.

“The low level of available space is due to a lack of new supply in the Manhattan office market,” noted Joseph Harbert, COO of the New York Metro Region for Cushman & Wakefield at the presentation. “Though many projects have been announced, and are either in the beginning stages or under construction, relatively little has been added to the market in the past 10 years.”

Harbert and industry experts in the audience explained that their predictions as far as Q1 ’08 goes are relatively fine, with carryover deals expected to close, however they are “waiting for the shoe to drop,” and are relatively uncertain about how Q2 ’08 will pan out. According to Harbert, little reprieve is forecasted for the next several years. Manhattan’s office space inventory totals 390.6 million sf, and in the next three years minimal new construction will come on the market. “Considering that more than 15 million sf was leased in Midtown Manhattan alone this year, the seven million sf being added to the market in the next three years will do little to ease Manhattan’s space shortage,” Harbert explained.