Offices.net Publishes 2016 Manhattan Office Forecast

According to the new report released by Offices.net last night, Manhattan has seen office vacancy rates decrease from 9.3 per cent to 8.5 per cent. This decrease equals to 90 basis points on a year-on-year basis, and brings vacancy rates below Manhattan's historical average of 8.9 per cent, and is likely to create a market favourable to landlords over the year ahead.

"Over the past 12 months, federal economic policy has been focusing on expansion, driving an increase in employment rates, especially as far as office-based employment is concerned," said Offices.net director Matt Aird. "The new report from Offices.net demonstrates that this type of employment grew by 2.6 per cent in just 1 year, and prompted a considerable increase in demand led by occupiers in the Manhattan financial services sector. In certain Manhattan sub-markets such as in Midtown South this is being driven by strong demand from tenants in the TAMI (technology, advertising, media and information) sector."

The report details that at the end of 2015, total office stock in Manhattan was just under 395 million square feet, of which 28 million were vacant. Total transaction volume amounted to more than 28 million square feet, one of the highest figures of the past 10 years. However, there was a slight decline in transaction volumes in downtown Manhattan, where transactions mostly involved small and medium-sized office properties

Average asking rates increased by 5.7 per cent to $71.58 / square foot, up from $67.70 the previous year. Rental rate increase was also significant for Class A rents, which grew by 4.2 per cent with respect to 2014 and reached average values of $76.76 / sq ft. Downtown Manhattan and Midtown South (the latter being a particularly tight market) experienced marked rental growth, as average asking rents in these sub-markets grew by 2 per cent over the past 12 months.

"During 2016, growth is anticipated in the Manhattan office market with regards to rental rates, leasing activity, and transaction volumes," continued Mr Aird. "This will be mostly driven by the availability of newly released office space, since according to market analysts at Cushman & Wakefield, at the end of 2015 there were 12.1 million square feet under construction in Manhattan."

Up to 11 new developments will be delivered by the end of the year, especially in sub-markets like Penn Station, the World Trade Center, [Park Avenue](http://www.offices.net/offices/b87699601026010dfo.htm), Grand Central, Hudson Square, West Village, and Chelsea. Occupier demand in these areas is expected to rise significantly over the next 12-15 months.

Read the full report [here](http://www.offices.net/news/manhattan-office-space-market-2016/) Find out more about Offices.net [Manhattan](http://www.offices.net/ny/manhattan/) office space.

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