NYC-WTC_000195490

NYC 9/11 Public Portal Document

square feet have been added and VACANCY RATES AND ASKING RENTS IN THE there are only around 8 million PRIMARY AND SECONDARY OFFICE MARKET square feet of pre-leased inventory Asking Rents In New York cKy should stabilize In 2001-2005, in the pipeline, with an expected as new Inventory and slower |ob growth ease some of the demand-driven pressures. I?! delivery by 2003, 20 80 ■ Vacancy Rate-Primary- Market, Lefi Scale ■ Vacancy RaieSecondar)' Market, Left Scale Vacancy rates in the primary Asking RentS'Primary Market. Right Scale 70 Asking Rents-Secondary Market, Right Scale market, consequently, are expected to rise only slightly in 2001 and 15 60 2002 before stabilizing in 2003- 2005 at around S percent. Asking 1 jPor^cost

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f i rents also level off, with some landlords in the tonier buildings I10 40 perhaps offering minor concessions like free rent for some months or I 5 30 s’

construction cost incentives as I demand tapers off slightly. In the 20 secondary market, because of a higher concentration of the high- 0 10 tech companies which have already , 96 97 98 99 00 01 02 03 04 05 begun to givd back a substantial amount of space, vacancy rates will elimb to over 7 percent in 2001 and over 8 percent by 2002. Rents are expected to fall back slightly in 2001 and then resume average growth of 3 percent per year in 2002-2005. The run-up in the secondary market, where in some cases rents for new spaces in up-and-coming office markets like Chelsea and Hudson Square approached primary asking rents, has ended.

Despite an overall slowdown in the national economy from an incredible run in 1999-2000, the City is JH I expected to continue to grow, yet at a moderate pace. The lower reliance on the manufacturing sector,(a diverse serj-ice and financial sector and stable real estate market should enable the City to weather the national slowdown. Si#'/ H ■ i ‘ ■

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