New York Office Market Report

Demand for trophy floor plans fuels Manhattan’s momentum. Companies are slated to move into at least 7.8 million square feet of office space in the borough through 2024. Roughly 65 percent of that volume — over 5 million square feet in total — will be to properties that were built or heavily renovated in the last decade. Primarily fueling this trend has been a rush from hedge funds, private equity firms and other financial services providers toward trophy offices. A tightening labor market, with metro unemployment falling to an over four-year low of 4.8 percent in April, may further motivate similar companies to leverage updated, high-quality spaces to recruit and develop talent. Newer, existing stock should continue to be sought by tenants, sustaining downward vacancy momentum here as near-term additions to inventory are expected to moderate.