NEW YORK CITY—Put a bunch of local commercial real estate executives together—which will happen Wednesday at RealShare New York—and there are a couple of things they agree on. First, the market's strength is undeniable, by a number of measures. Second, the way in which the rate of property leasing and sales has grown, and is poised to continue, is possibly the healthiest way forward.
“We're in a very strong real estate fundamentals marketplace right now in Manhattan,” declares Arthur Mirante, principal and tri-state president, Avison Young. “Demand is steady but not off the charts and we have new development and new product, which is always healthy.
He continues, “Activity levels last year were close to the record but I don't think we'll break the record this year. However, we'll probably see above $30 million of activity this year, which is damn good.”
In other words, growth has been “slow but steady,” adds Bruce Mosler, chairman of global brokerage, Cushman & Wakefield. “The current market is very favorable. We continue to see rent improvements in Midtown, Midtown South, Downtown and Midtown West.”
Further, he continues, “As a percentage of inventory, development is only about 5% and there's enough demand to keep us in balance. Leasing continues to be driven by the TAMI sector while investment banking continues its recovery.”
Adds Peter Turchin, vice chairman, CBRE, “This is a pretty interesting time in the market; we're hovering around that equilibrium. We're seeing an availability rate of 10.5% in Midtown and 11.9% Downtown. Historically, when those numbers got pushed down a bit, we see some changes in pricing. That's pretty exciting.”
In fact, he adds, some pockets of the market may be on the verge of a turf war. “In Brooklyn, we're seeing that it has the hip factor but not the space, whereas Jersey City has the space but not the hip factor.”
Turchin continues, “You're seeing a huge push to change both of these. So which will happen first? It's going to be the best battle to watch over the next year.”
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