NYC to See 19M Square Feet of New Development by 2018

NEW YORK CITY—A newly released analysis of the New York City commercial real estate market by the New York Building Congress estimates that 19 million square feet of new office development will come online by 2018.

The report states that with the two completed towers at the World Trade Center and another rising at the Hudson Yards development, Manhattan will see 9 million square feet of new development take shape between the years 2013 and 2015.

The Building Congress is currently projecting that another 10 million square feet of new office space in six buildings will come online between 2016 and 2018, including 30 Hudson Yards, 1 Manhattan West, and both 2 and 3 World Trade Center. While anchor tenants and construction financing still need to be secured, the developers of these projects have the necessary approvals as well as sites that are either currently ready or are being prepared for construction in the near future, the report states.

In addition, although not projected to be completed before the end of 2018, Mayor Bill de Blasio has supported a plan for a 1,200-foot tall office tower across the street from Grand Central Terminal. If approved and financed, that tower would result in considerably more than 1 million additional square feet of new office space.

In total, the Building Congress projects 24.4 million square feet of new office construction from 2010-2019. This compares favorably to the 19.4 million square feet completed from 2000-2009, and the 10.7 million square feet delivered in the 1990s, though it is just half of the 49 million square feet that was completed in the 1980s.

"Back in 2003, government officials unveiled ambitious plans to redevelop the World Trade Center and Manhattan's Far West Side into dynamic mixed-use districts featuring a concentration of very tall, ultra-modern office towers," says Building Congress President Richard T. Anderson. "After a decade of upfront investments and a period of great uncertainty following the national recession, these visions are finally being realized."

Despite the surge in new construction, alterations and renovations to existing office space remains the dominant source of office construction spending, according to the New York Building Congress. The organization estimates that on average approximately 70% of construction spending in the office sector has been devoted to upgrades of existing space.