NEW YORK CITY-It's a good problem to have.
A big spike in sales of office condominiums has put the squeeze on companies in search of new digs. And while that's a sign of a healthy recovery, it spells bad news for anyone looking for a price break on office space.
So says a new report by Rudder Property Group, which estimates that, in July, there was only about 300,000 square feet of office condo space available citywide, excluding two large commercial condo buildings that were designed for specific types of tenants, according to Crain's New York Business.
"We need more product," says Michael Rudder, principal. The lack of supply has pushed prices higher. RPG's market report listed $168 million of condo sales in the first half of 2013 and that pricing on average for office condo space had hit $631 per square foot, up 30% from the second half of 2012.
The two specialty condo properties, 40 Rector St., and 50 W. 47th St., have a combined 60% of the city's available condo space, Crain's reports. But 40 Rector has more than 30,000 square foot floor plates and is tailored predominantly for large tenants, while 40 W. 47th St., better known as the International Gem Tower, offers condo space exclusively to diamond and jewelry tenants.
"If you're not a jewelry tenant and you're not 25,000 square feet or larger in size, you really aren't looking for space in those buildings," says Rudder, to Crain's. “And right now, there are really not too many other locations to go to. We're talking to developers to create new condo projects.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
