President Bill Clinton recently announced that the owners of the Empire State Building in Manhattan will be doing a $20 million dollar green face lift of the building. Clinton's foundation is assisting in the environmental upgrades which will include the replacement of 6,500 windows with insulated glass. The $20 million project is expected to save the building's owners $4.4 million annually in energy costs, and will reduce its carbon dioxide emissions by 105,000 metric tons during the next 15 years, equal to the annual emissions of 17,500 cars according to MSNBC. Clinton said the only way to get property owners worldwide to make over their buildings is by setting an attention-getting example. "We have to prove it's good economics, and we have to prove we know how to do it," he said. "Every person on Earth who cares about this knows about the Empire State Building."
Work already has begun, with the upgrades to the building systems expected to be completed by the end of 2010 — longer than it took to build the skyscraper, which opened in 1931 after a year and 45 days of work.
All of the building's green projects are expected to be finished by the end of 2013.
Manhattan Office Space , Office Space
A recent article in the Wall Street Journal reports that office vacancy has reached 15.2% and is expected to continue rising to 19.3% over the next year. The data comes from REIS, Inc a provider of commercial real estate performance and analysis data for over 25 years. Over 25 million square feet were returned to the market in the first quarter of 2009 driving vacancy rates up and rents down. "Effective rents, which include free rent and other landlord
concessions, fell 2% in the first quarter to a national average of
$24.16, the largest drop since the first quarter of 2002, according to REIS. Sublet space, on average, is going for between 10% and 15% less
than what landlords are charging."
It is a great market for tenant looking for space or renewing during the next 12 months. Smart Landlords cutting deals to keep their buildings full during this downturn providing tenants a great opportunity.
Markets such as Houston and Washington DC, with less exposure to financial services, is weathering the downturn better than others like New York City. The vacancy rate in New York increased two percentage points in one quarter, from 8% to 10.2% and rents dropped over 5% to $52.00 per square foot, still over double the national average.
How can you, as a tenant, take advantage of this opportunity? Make sure you get professional assistance. OfficeFinder tenant representative specialists can provide you the answers to your questions and help you find and negotiate (or re-negotiate) a great deal. There is no obligation to contact them and there is usually no cost to you for their services. Request a contact.
Houston Office Space , Lease Negotiations , Manhattan Office Space , Office Relocation , Office Space , Tenant Representation , Washington DC Office Space
From CRE News and CBRE. The available amount of sublease office space in Manhattan is equal to or greater than many small office markets... Mindboggling, yet not surprising. Do you suppose office space rents are going to be coming down?
"The amount of office space available for sublease in Manhattan rose 39% since mid-year 2008 to 11.9 million square feet, according to a report issued by CB Richard Ellis. The brokerage estimates that the sublet market could grow by another 4 million square feet in the coming months. Sublease space accounts for 29% of the market's total availability, with the bulk of it coming from financial services companies. That sector makes up 25% of Manhattan's 362 million-sf inventory.
Financial services companies AIG, Bank of America/Merrill Lynch, JP Morgan Chase and Barclay's/Lehman are among those expected to add more space to the borough's sublet market in the coming months." http://is.gd/lZkh
General , Manhattan Office Space , Office Space
Cushman and Wakefield recently published their Winter 2009 Office Space Forecast and it's not a pretty picture. Basically, it is what we would expect with this economy. Office space occupancy in the CBDs will continue to deteriorate due to employment reductions throughout the the US. This will occur even as the economy starts it's rebound.
No surprise that they are also predicting sublease space offerings to continue their uptrend.
According to the report, rental rates will begin their descent and bottom out by year end 2010. With vacancies increasing they are predicting that the gains made in rental rates over the past 3 years will be wiped out.
"Manhattan, San Francisco and Orange County CA could see rates dropping as much as 20.0% from 2008 levels. Meanwhile, energy-producing markets like Houston will remain bright spots (though not necessarily for long if oil and gas prices continue to fall), as they are expected to eke out modest rent gains throughout this economic downturn." They also predict that Boston, Philadelphia, Washington, DC and Seattle will weather the current downturn much better than other markets. While new York and New Jersey are expected to be the weakest and slowest to recover.
C & W Winter 2009 Forecast (pdf)
Houston Office Space , Manhattan Office Space , Office Space , Washington DC Office Space
The outlook for office space vacancy rate in the Manhattan office space market is not pretty for Landlords. Vacancy rates are predicted to increase from around 5% a year ago to between 11% and 17%, depending on where you get your numbers. Third quarter results show that Manhattan office vacancy the highest in over 2 years at around 7.5%. I can't imagine that this will come as a surprise to anyone in the industry. The October Financial Crisis resulted in the loss of thousands of jobs in Manhattan. New York state is predicting that 160,000 state residents could loose their jobs because of the economic downturn. The New York City Comptroller predicts that up to 165,000 people could loose their jobs in NYC over the next two years. At 200 square feet per person, that is around 33 million square feet that could go empty. Put that together with a bleak outlook for our economy and the result will be an increase in office space vacancy. It is expected to happen quickly. Many pundits predict that we will have vacancy rates in Manhattan between 9% and 10% by the end of the year.
It is bad news for Landlords, but also presents many great opportunities for Tenants in the market. Tenants will have much greater negotiating power. Some Manhattan Landlords are even offering up to one year of free rent on 10 year leases. Sublease space available for lease has nearly doubled from 3.5 million square feet a year ago to 6.5 million square fee now. Rental rates in Manhattan are still some of the highest in the world averaging around $73.00 / sf / year. It is expected they will to decline in the neighborhood of 15% to 20% over the next year as the full extent of the vacancy rate climb is realized and as company trim their staffs to survive a bleak economy.
If you are in the market now, plan to be in the next 12 months, or have a renewal coming up within the next 2 years, it is a great time to start looking at your options. The best way to do that is to make sure and work with a professional tenant rep. There is very rarely any cost to you to obtain their services. Landlords are in the business of renting space. You run your business and are likely only lease space a few times in your business career. Level the playing field with a professional who is on your side and in the office leasing business on a daily basis.
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General , Manhattan Office Space