The year has begun on a strong note with the office leasing segment in New York touching a new high in the first quarter itself.
Brokerage firm Colliers International has disclosed that the average rent being paid to landlords for leasing office space in Manhattan hit a new high this first quarter. Low unemployment also hit historic its historic.
As per Colliers International, the asking rent has risen to $73.92, from $72.24, for 1 square foot.
The asking rents set new highs, for the technology driven sector of Midtown South. Although the asking rents also rose comparatively for the quarter in Midtown, which incidentally is the largest U.S. office sector by far, they were however still 10.4% lower than a record $92.04 a square foot, which was set in the third quarter of 2008.
While leasing activity declined by 4.6% in comparison to the first quarter of 2016, it was still higher by 27% from its 10-year average.
“The New York market continues to show signs of strength and optimism,” said Joseph Harbert, president of Colliers’ eastern region.
He went on to add that 2017 is likely to be a strong year for office leasing, which is significant since it is the largest of the five commercial real estate segments, the other being warehousing, hotels, apartment buildings and retail.
Demand by foreign investors for purchasing office buildings have remained strong. As per Colliers, of the 14 deals amounting to $2.6 billion which took place in 2016’s third quarter, 73% were foreign buyers.
The expected rate of return on investment is relatively low since both foreign and domestic investors place a premium on New York real estate, said Colliers.
As per the New York state’s labour department, the non-seasonally adjusted unemployment rate for the city had fallen to 4.8% in February from 5.6% a year ago.