New York City’s office market is demonstrating signs of robust recovery, with fundamentals reportedly stronger than they have been since before the pandemic.
At the Bisnow CEO and Top Executives Summit, industry leaders expressed optimism regarding the current state of the market.
“New York is firing on all cylinders,” stated Adam Doneger, Executive Vice Chairman at Newmark.
He pointed out that the current level of bidder activity and interest in New York real estate has reached heights not seen since 2018, which was a significant year for the business.
Notably, the city recorded its strongest leasing quarter since 2019 at the beginning of the year, as reported by executives from major office owners such as SL Green and Nuveen at Convene 360 Madison.
Shawn Lese, Chief Investment Officer at Nuveen, highlighted the growing interest from international investors, particularly from South Korea, Japan, and Singapore, who are eager to explore NYC office opportunities.
Lese emphasized that a full-time return to the office is anticipated and the consistent flow of bids from both domestic and international investors reflects the strength of New York City’s real estate market.
“Over the course of the last probably year to right now, we get unsolicited bids from high net worth family offices for everything that we own in New York City,” he noted.
This enthusiasm is not mirrored elsewhere in the country, showcasing the unique positioning of NYC.
Investor interest is complemented by significant tenant demand, despite external factors such as the White House’s tariff announcement on April 2, which caused volatility in the stock market.
Harrison Sitomer, Chief Investment Officer at SL Green, revealed that the leasing pipeline for NYC’s largest office space owner has actually deepened in recent weeks, a positive sign amid turbulent conditions.
Looking back, Sitomer contrasted the current market with that of 2021, when capital markets were thriving but fundamentals were weaker.
“Now we sort of have the opposite; capital markets are somewhat retrenching, but at the same time, fundamentals are outperforming,” he remarked.
Recent data from Savills indicates that office owners successfully inked 12.2 million square feet of leases in Q1, with vacancy rates dropping from 20.1% to 17.7%.
Peter Riguardi, Chairman and President for the New York Region at JLL, echoed these sentiments, noting that real estate fundamentals across NYC reflect trends seen in major cities nationwide—a distinct scarcity of quality office space.
“There are many buildings that, if they’re capitalized and curated correctly, can achieve their highest rental achievements ever,” Riguardi said.
However, the looming impact of tariffs continues to pose challenges for the market.
Adam Flatto, CEO of Georgetown Cos., indicated that several transactions had to be paused due to uncertainties in the capital markets stemming from the tariff situation.
He remains hopeful that rationality will restore stability in a few months without abandoning ongoing transactions.
Lese expressed concern over the potential repercussions of tariffs on the NYC office market, noting their capability to trigger broader economic difficulties.
“Tariffs don’t just impact materials; it’s the whole entire underwriting that you’re doing on a property,” he cautioned.
As the market navigates these complexities, the consensus remains that New York City’s office sector is poised for resilience, indicating a positive outlook for investors and stakeholders alike.
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