By Holly Dutton
It’s all about lower Manhattan in 2015.
That’s the verdict from commercial real estate executives, who expect activity downtown to just keep growing, building from the momentum of 1WTC, Brookfield Place, and the newly-opened Fulton Transit Center.
According to Cushman and Wakefield’s 3Q 2014 market report, September 2014 marked the 13th successive month in which new leasing exceeded 2.0 million square feet — the longest consecutive period of 2 million s/f or more of leasing on record.
Led by Hudson’s Bay Company’s lease at Brookfield Place, Downtown’s vacancy rate continued on a downward trend, finishing at 9 percent from 10 percent at the end of the second quarter.
Downtown rents were also up, rising 5.3 percent on the year to finish at $48.43 p/s/f.
“I think that logically you’ll see downtown, that’ already showing historic activity, with continued momentum,” said Mary Ann Tighe, CEO of the New York Tri-State Region of CBRE. “I think we are going to have an unusually busy first quarter.”
Certain corridors of Midtown, particularly Times Square and Third Avenue, will see increased activity as well, with rents there actually lower than in Midtown South and parts of downtown, predicted Tighe.
Tighe’s firm will be working on finishing up leasing at 285 Park, of which she said they are “well on our way to closure there,” and also looking to do the same at 7 Bryant Park, along with 3WTC and 285 Madison.
Scott Rechler of RXR sees lower Manhattan as the big story in 2015.
“I think downtown’s going to be pretty vibrant,” he said. He added that the outer boroughs will also be a strong area of activity.
“The big thing will be the rebirth of lower Manhattan, which will continue to be recognized globally and will be a true sought-after 24/7 business district,” said Rechler.
“I think you’ll see the boroughs continue to flourish as more and more people and young professional move there and young companies move there and attract talent.”
RXR will be busy this year working on the redevelopment of 75 Rockefeller Center, 275 Park, and Pier 57.
“I think we’ll continue to see leasing in downtown (in 2015),though Hudson Yards has picked up as well,” said Heidi Learner, chief economist at Savills Studley. “Those two will see a lot of activity.”
Learner predicts that interest rates will move gradually, and not until the second half of 2015. “I think they’ll be very gradual, I don’t think it will effect financing terribly.”
Bill Rudin of Rudin Management sees the tech sector just getting stronger in 2015.
“On the commercial side, we’ve seen tremendous momentum in Lower Manhattan, and increasingly in the outer boroughs driven substantially by Brooklyn.
“The tech sector continues to be hot here. Companies like WeWork are curating more and more office space for growing tech and creative firms throughout the city. This is where the workforce is,” said Rudin .
“It’s definitely a hot market and right now, we only see it getting hotter.”