Manhattan Office Market Showing Signs of Resilience
February 17, 2023
According to research from Ariel Property Advisors Property Advisors, the New York City office market shows signs of growth and demand. In the first half of 2022, investor demand for office buildings in the city rose to $4.7 billion, an 11% increase from 2H 2021 and a 353% increase from 1H 2021.
Two transactions that stood out in the market include Google’s $2.1 billion purchase of the St. John’s Terminal in SoHo, which accounted for 45% of the dollar volume in this asset class, and RFR’s purchase of 475 Fifth Avenue in Midtown for $290 million, which is more than double the amount paid for it in 2011.
Tech companies such as Google are leading the way in creating unique and amenitized workspaces to retain knowledge workers, and this trend is expected to continue. Other tech giants like Amazon, Meta (Facebook), Roku, and Microsoft are also investing in the office market by leasing or renovating office spaces in desirable locations and leaving it to landlords to make significant improvements.
Investors are also looking for quality and well-tenanted buildings in desirable locations, as seen in RFR’s acquisition of 475 Fifth Avenue and other recent transactions like Commonwealth Partners’ $1.033 billion acquisition of Hudson Commons, Meadow Partners’ $288.23 million purchase of 95 Morton Street and Macquarie Asset Management’s $130 million acquisition of 375 W Broadway.
