By Richard Persichetti
Regional Director, Tri-State & Northeast
For the second time in three years, the New England Patriots are back in the Super Bowl, and as a New York Jets fan…well, hopefully you can sympathize. Regardless, I will not let the team that has tormented me for most of my adult life keep me from writing the fourth annual Manhattan Stat Bowl. As always, the game will pit Manhattan Class A versus Class B and how their statistics fared in 2016 in four different categories. Class B leads this historical showdown two games to one, but let’s see if Class A can repeat as champion and even the win column.
The Stat Bowl begins with a comparison of overall absorption as a percentage of Class A and Class B’s total market size. Manhattan Class A absorption totaled 2.5 million square feet, which accounts for 1.0 percent of its inventory. Class B overall absorption totaled only 279,959 square feet and accounted for just 0.3 percent of its inventory, which puts Class A space in the early lead, 1.0 percent to 0.3 percent.
The second quarter scoring will be based on new leasing activity as a percentage of the market size of each class. In 2016, 17.3 million square feet of Class A leases were signed, equaling 6.8 percent of the market inventory. Class B new leases signed totaled 6.0 million square feet, but only accounts for 6.1 percent of its inventory. At halftime, Class A space maintains a slight lead in this year’s Stat Bowl, 7.8 to 6.4.
The third quarter compares the change of overall average asking rents in 2016. Class A asking rents jumped 2.2 percent year-over-year to $78.43 per square foot. Despite Class B asking rents jumping 18.3 percent from year-end 2013 through 2015, increases stopped in 2016 and rents dropped 1.0 percent to $60.11 per square foot. This penalty has Class B down one point, and Class A’s lead grows 10.0 to 5.4.
Since lease renewals accounted for one-fourth of the market’s total leasing activity in 2016, the final quarter will be based on the percentage of renewals compared to the size of each market. Class A lease renewals totaled 7.1 million square feet which equals 2.8 percent of the market inventory. Only 1.2 million square feet of lease renewals were completed in Class B space, and accounted for 1.3 percent of the market size. Class B came out flat in the second half, which ultimately handed the game to Class A, making them the back-to-back Stat Bowl champions for 2016 with a final score of 12.8 to 6.7. Unlike this year’s Stat Bowl, I expect a high scoring game for Super Bowl 51, with the Atlanta Falcons edging out the New England Patriots 35-31.
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Rich Persichetti is the Research Director for the Tri-State/Northeast Region. He has been with Cushman & Wakefield (formerly DTZ) since 2012 and has over 18 years of commercial real estate experience. Rich has authored the Stat of the Week column in the Commercial Observer for nearly five years.