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Market Report

New York Office Market Report

2024 Investment Forecast

Proximity to Public Transit a Priority for Tenants;
Buyers Returning to Class B and C Assets

Well-located floor plans to note solid performance. Entering 2024, Hudson Yards and immediately surrounding neighborhoods retained their status as New York’s most dynamic office hub. A January relocation by HSBC into The Spiral highlights a long-term shift in tenant priorities, in which larger employers are consolidating operations into newer amenity-rich builds within close walking distance of major transportation nodes. Leases near Grand Central Terminal and in the Financial District, where other commuter lines converge, should also remain in high demand. Notably, net absorption in the Class B and C segments returned to positive territory in Midtown last year, indicating that older properties in prime corridors are also drawing tenants. Still, nearly 4 million square feet of space being relinquished by WeWork in this submarket and in Midtown South will create near-term headwinds for vacant floor plans in these locales, particularly those placed in buildings lacking immediate access to public transit. Emerging initiatives to incentivize office-to-residential conversions may, however, provide alternative uses for the vintage assets in less-accessible neighborhoods that have struggled to secure tenants.

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