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What Storm?

New York
What Storm?
CB Richard Ellis' Bruce Surry, Shelly Cohen, and Matt Van Buren
Forget the impending doom of supply increases Downtown—the submarket's ready to handle the 1.5M SF of office space projected to be added, said market gurus at CBRE's quarterly research breakfast at its 200 Park HQ yesterday morning. 1Q unfolded a lot like we thought it would, says Midtown office head Matt Van Buren (right, with Downtown EVP Bruce Surry and office head Shelly Cohen). Velocity is returning to a norm, and we saw 1.7M SF in leasing with positive absorption. As of April 1, there is over 14M SF of sublease space on the market, which has shrunk since July's 16M SF; well-built, attractive sublease space has been taken. In Midtown, the ask-to-take ratio was 95% in the hot market, and has now jumped back to the mid-80s. He's cautiously optimistic about the market, as it's still a slow, steady climb out.

Nighttime shot of Downtown Manhattan
A rise in Midtown pricing will bode well for Downtown, placing it in a relatively good position to withstand space additions from buildings like 70 Pine and 85 Broad—the 1.5M SF equals just 1.8% of availability, says Bruce. Financial and related industries no longer are the primary tenant in the submarket, notes Shelly, pointing to the increasingly diverse tenant base, boosted by the emergence of a 24/7 market, earmarked physical improvements, and the incentives attracting people downtown. Bank of America will likely have some footprint Downtown, and Bruce points to publishing, media, investment, brokerage, and professional services firms currently on the ground, looking for space in the submarket.
Related Topics: Matt Van Buren, Shelly Cohen