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Manhattan's office market is experiencing challenges similar to its apartment sector as shrinking rents and rising competition force landlords to ramp up concessions to keep tenants.
Effective rents slipped 7% in Q4 to an average of $57.18/SF, according to brokerage firm Savills Studley, and leasing has fallen as tenants ramp up their sublets, Bloomberg reports. Together these conditions have created a perfect storm for NYC landlords, who are fighting to keep tenants by making offices more collaborative and adding tons of amenities.
Those steps aren’t cheap, but it’s the price owners are paying to keep tenants from moving across the street to competitors offering cheaper rents, experts say. [Bloomberg]
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