Word count:?258 words, 2 minutes
23 days in to the new year, I trust that, like myself, you're settling back into the rhythm of things. It's a fascinating time for commercial real estate in New York. With that said, I'm excited to unveil my top 7 predictions for the office leasing market in New York for 2024. Let's dive in:
- Office leasing prices at the top end of the market (Class A & Class A+ buildings) will move higher as a result of the scarcity of new development. There are very few new office buildings being built currently in NYC creating a scarcity of new high-end office space.
- High-end subleases will not stay on the market for long. Companies subleasing that type of space will have high recovery rates given the demand for built-and-furnished space. They'll be able to lease it quickly, and at a smaller loss than many anticipate (Also, see prediction #1)
- The Return To Office pendulum will continue to swing in favor of employers as organizations continue to recognize the value of in-person collaboration, and the benefits of in-person mentoring. (Heavily favored by Financial Services & Legal and less by Technology companies)
- The good vacant space (great locations & solid buildings) left by the WeWork situation will be gobbled up by other existing flexible providers, as well as new entrants to the flex office market, as demand for flex space increases.
- There will continue to be great value on Third Avenue as the availability of similar office space closer to Grand Central and Sixth Avenue keeps downward pressure on pricing.
- Finance and legal sectors continue to outpace technology company leasing.
- We will see a subset of companies relocate east across the river into the Financial District as the difference in pricing for Financial District leases (sub $45/SF in some buildings) vs Jersey City (sub $30/SF in some buildings) continues to narrow. It'll get cheaper to be in the city with greater access to a wider pool of talent.
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