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Deals & Dealmakers

Report: NYC to add 16M s/f of office development in 2019

A new report has found New York added over eight million square feet of office stock to its inventory last year as the economy continued 110 consecutive months of growth.

After a rather tepid 2017 performance, the U.S. office market gathered some steam in 2018, adding 76 million square feet of new office space and completing roughly 396 new projects in its top 40 most active markets for office completions, according Yardi Matrix data.

According to numbers recorded up to April 9, on a national level 662 buildings and 115 million square feet of new office space are on track for delivery this year.

While some reports raise concerns about how the pace of development will be affected by tariff and trade wars, growing construction costs and labor shortages, the office sector is expected to hold up better than it has in earlier downturns.

This is mainly due to more restrained lending practices, a more moderate pace of development and the concentration of new office properties in markets with significant job growth.

There were roughly 8.3 million square feet of new office space completed in Manhattan, Brooklyn and Queens in 2018, increasing the city’s 520 million square foot office inventory by two percent and placing it in first place among the top 40 markets for office deliveries.

Dallas came in second, with seven million square feet of new office space and 31 completed projects and is expected to deliver 6.6 million square feet of new office space by the end of 2019.

Miami had a five percent inventory growth ― the fastest rate among the top 40 markets for office completions ― as 11 projects delivered 3 million square feet of new office space in the past year.

The 80-story 3 World Trade Center completed in June added 2.8 million square feet of new office space to the New York market, earning the title of the largest office project to come online in 2018.

The 1,079-foot tower, owned by Silverstein Properties, is the second tallest building in the World Trade Center complex and the fifth tallest in the city.

New York City leads the list of top 40 for office deliveries in 2019 with 46 projects currently underway that will add 16 million square feet to the market, followed by the Bay Area in second place, with 37 projects and a total of 10 million square feet of new office space.

Chicago’s 23 scheduled office deliveries for 2019 add up to roughly 5.6 million square feet of new space, 116 percent more than the amount completed in 2018, when the market’s office inventory grew by 2.6 million square feet.

Seattle’s expected office delivery numbers have jumped by 286 percent, as 26 properties totaling 6.4 million square feet of new office space should hit the market by the end of the year, according to Yardi Matrix data.

Six California markets have made it into our top 40 list for scheduled office completions for 2019. Between them, the Bay Area, San Francisco, Los Angeles, Sacramento, San Diego and Orange County are expected to add roughly 26 million square feet of new office space this year to their existing inventories.

Orlando is the only office market in Florida where the total number of properties expected to come online this year exceeds the 1 million-square-foot mark, as 7 projects are set to increase the office inventory by 1.1 million square feet.

Apple’s 2.9 million square foot campus in Cupertino has topped the list of top office completions throughout 2018, but although several phases have been successfully completed, the building is not yet ready for occupancy.

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