Office workers and the space they occupy grew to reach record highs in New York City in 2016, according to a report from State Comptroller Thomas DiNapoli.
During the year, the number of office workers grew to a record 1.5 million. This coincided with an unprecedented expansion of office spaces in the city. Office properties reached a record 550 million square feet during the period.
“New York City’s office properties are an important part of its economy, attracting businesses and workers from around the world,” said DiNapoli.
“Demand has been strong. Millions of square feet of new office space has been developed, and millions more are in the pipeline. In recent years, job growth has met the increase in office space, but job growth has begun to slow. The time needed to fill the additional space will depend on the future pace of employment growth.”
Since 2009, the number of office workers in the city grew by 15 percent or 202,000 jobs. That figure represents almost one-third of the 620,000 total jobs that were added in the city over the past eight years.
According to the report, 87 percent of the office jobs added came through the business services sector, which includes lawyers and accountants, and the technology, advertising, media and information (TAMI) sector. The number of office workers in the city represents one-third of the 4.3 million total jobs in the city.
Meanwhile, Midtown, Midtown South and Downtown Manhattan, were the center of growth for office spaces in the city. The three areas accounted for 450 million square feet of the city’s 550 million square feet of total office space.
According to data from the Department of Finance, the total market value of office spaces in the city reached $168 billion for fiscal year 2017. This amounts to an increase of 179 percent since 2000.
The expansion coincided with a reduction in Manhattan’s vacancy rate. Since 2009, the borough’s vacancy rate dropped 12.8 percent to 10.1 percent in 2016. Rental rate have also grown during the period, increasing by almost 25 percent to $71.70 per s/f.
DiNapoli expects continued growth in the city, saying that “market values and new construction will drive property tax collections through the rest of the decade.” For fiscal year 2017, he expects office-related tax collection of above $6 billion. In 2016, the city collected a record $5.8 billion in tax revenue from office buildings.