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Market Report

New York City Office Investment Forecast

2020 Outlook

Big Tech Claim Prime Real Estate in Hudson Yards, Open Opportunities for Investors Across the Market

 

Hudson Yards claims prominent tenants as construction shifts east.Several major technology firms committed to occupying new office space in the metro within the next couple of years. Facebook led the charge with 1.5 million square feet across three buildings around Hudson Yards, while Google leased 1.3 million square feet just south in Hudson Square. Amazon will occupy 335,000 square feet in the general vicinity, a smaller footprint compared to the once-proposed Long Island City HQ2. These substantive leases are markers of success for the Hudson Yards development, which has added more than 4 million square feet of office space to Manhattan so far, most of it already claimed. Multiple new towers are also on the way for after 2020. The largest delivery this year is farther east, though, at 1 Vanderbilt Ave. The luxury skyscraper connects directly to Grand Central Station, with estimated rents above $130 per square foot. Altogether, about 8 million square feet of office space will open in New York, the second most active office development year this cycle. The elevated supply growth is moderately weighing on operations as the city’s vacancy rate extends above 11 percent.

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