According to a forecast released by Cushman and Wakefield this year, the rents for NYC office spaces are on their way up and will increase by 16% over the following three years. This has been cited the second biggest gain in the entire nation with San Francisco taking the lead. It beats Manhattan’s performance with a stronger rebound and San Francisco’s rents are expected to soar by 33% through 2013.
New York’s brave fight against recession and its emergence as a strong competitor has been mostly owing to its relatively strong job market. Where most other cities are still struggling to survive the effects of the downturn, New York has already managed to recover 40% of the jobs that collapsed during last year’s recession.
Within the city, the areas that have shown exceptional performance and driven this phenomenal rebound are midtown and midtown south. The latter, at 8.6%, showed the lowest vacancy rate of the central business districts throughout the country. And in the coming three years, this figure will fall further to less than 4.5% – again the lowest in the entire nation. As far as rents are concerned, they are expected to go up by 22% through 2013.
Experts believe that while several factors contribute to midtown south’s popularity, its notable feature happens to be the older buildings in the neighborhood. Most of them have beautiful exposed brick walls and tall ceilings, making them a priced commodity among several commercial establishments.
When it comes to Manhattan’s midtown neighborhood, the vacancy rate is estimated to fall from 10.6% last year to 7.5% this year. And projected rent rise for midtown is around 17%. The figures for Manhattan’s downtown continue to lag behind. While the current vacancy rate is 11.5%, it is only projected to go up to 13.5% with the One World Trade Center nearing completion.
The forecast for the entire nation is also heartening. Office spaces around the country are expected to reach pre-recession levels no later than 2015. In fact, in the next two years, warehouse and office rents could very well be more expensive than apartment rents. In 2014, the office rents will be around 7.7% and the following year it will peak at 8%.
These predictions have offered a lot of hope to commercial property holders. How accurate these forecasts will turn out to be only time will tell as the rest of the nation watches on in suspense.