Back HomeMidtown Manhattan: The State of the Market and How It Affects the Neighborhood
It is no secret that the Real Estate market has seen changes and shifts in light of current events. Currently, there is a halt in the market, sometimes what investors like to call a “waiting period.” The New York City real estate market has slowed down and investors, sellers, and developers alike are waiting on a decision from the Federal Reserve or a shift in the way that properties are offered or marketed.
Looking at specific the neighborhood breakdown, there is an overall trend to move away from the pricier commercial districts to more reasonably priced ones in the Financial District and Midtown South. Kyna Doles of the Real Deal Magazine offers some statistics to get better insight as to why this trend may be happening. “Midtown Manhattan leasing activity totaled 1.2 million square feet in June, 3 percent below the five-year average. Year-to-date leasing is down 31 percent compared to the same period last year” (1). When the developers began building ultra high end luxury condos, back in 2012, perceived value and prices of Midtown began to increase as well. When neighborhoods become renovated, or for this article’s sake, “upgraded,” the standard of living for the residents and employees who work in the area also increases. Due to the upgrade in the district, commercial rents became rather expensive. Last year, when leasing in midtown reached an all-time high, luxury condos were being sold at skyrocketed prices. Fast forward to this year: companies are being priced out of the Midtown District and have moved to Downtown Manhattan, where “leasing activity [in Downtown] …is up above the five-year average,”(1).
Commercial Real Estate firms are now placing a lot of strategy in repositioning themselves to gain more tenants for the upcoming quarters. Many of the buildings in Midtown Manhattan are further developing their amenities to try to appeal to some of the younger, start-up companies, hoping that these amenities will help the start-ups to justify the high price points. One of the main focus points for developers has been terraces. “‘Everybody needs a little twist, and terraces add a lot of appeal,’ said Palmer Sealy III, who handles office leasing for TF Cornerstone” (2). Companies see the terrace as a value-added amenity; a way to entertain guests, employees, and clients. C.J. Hughes of the New York Times writes “New York is taking a fresh look at terraces, despite a climate in which workers can hardly depend on sunny days” (2). Many developers are adding seating, plants, and heating capabilities. Some firms are constructing these outdoor spaces so that companies have a private terrace for their exclusive use. Terraces, and any luxury amenity for that matter, are a perception of value by the consumer and a creation of value for the developer. Only time will tell if companies will be enticed; and whether or not this will have either a short or long term effect in commercial real estate for New York City.
Written By Kylie Keller
(1). The Real Deal
(2). The New York Times
