By Richard Persichetti, Vice President, Tri-State Research Lead
The 4th of July is upon us, and there is plenty to celebrate. Although direct average asking rents in Manhattan for all classes of office space are down 1.2 percent year-over-year, there have been some submarkets with skyrocketing rents. So whether you prefer the quiet and safe fireworks, the colorful ones or the really loud ones, here is a list of the nine submarkets with the least to most explosive rental increases over the past 12 months.
Remember those little white paper bombs you threw at the ground to make a little noise? These two submarkets barely recorded an increase in direct asking rents, but at least they did not decline.
Grand Central – Asking rents edged up $0.06 per square foot to $72.12, and in a Midtown market where seven of the nine submarkets posted rental declines, this was a big accomplishment.
Insurance – The first of four Downtown submarkets to make the list, as asking rents here increased $0.09 per square foot to $57.28.
These were always fun…for the first 30 seconds, but then the firecrackers kept popping for a steady five to 10 minutes and became boring. The following group of submarkets had the steadiest direct asking rent increases over the past year.
Greenwich/NoHo – This is the first of three Midtown South markets to make the list, and with a $0.90 per square foot increase, asking rents are now $75.08.
Madison/Union Square – This submarket also posted a $0.90 per square foot increase over the past year, with direct asking rents at $71.17.
World Trade – Direct asking rents are up $1.15 per square foot to $66.97, and this average is only going to soar higher with the completion of Three World Trade Center into the statistical sample.
East Side/UN – Direct asking rents in this submarket jumped $1.72 per square foot to $76.28, fueled by increases in Class A rents.
These fireworks are loud, colorful and light up the sky, and these three submarkets shined the brightest over the past year with explosive direct rental increases.
Financial West – Despite having the largest increase in vacancy of the 20 Manhattan submarkets over the past year, direct asking rents jumped 5.9 percent—up $3.24 per square foot to $57.72.
Chelsea – Vacancy in this submarket is at the lowest level in 16 months, which pushed direct asking rents up 10.0 percent, marking a $6.29 per square foot increase to $69.24, which is the highest rent on record.
TriBeCa – This submarket sits in the Downtown submarket but truly trades like a Midtown South submarket based on its supply, demand and rents. This allowed TriBeCa to post a 20.8 percent increase year-over-year, as direct asking rents lit up the night sky with a $16.18 per square foot increase to $94.07.
Richard Persichetti currently serves as the Vice President, Tri-State Region Research Lead. His 18-plus years of market research experience makes him an expert on the New York City market and allows him to act as a knowledgeable resource for clients. Rich is responsible for the oversight of the research and organization of statistical data for New York, New Jersey and Connecticut and works with local, regional and national marketing in order to enhance Cushman & Wakefield’s growing research platform. Through this role, Rich conducts primary and secondary research, tracking local real estate markets and economic trends.