New York Thrives in the Global Economy

An excellent white paper from Newmark where they look deeper into the now oft touted tightening of the office market in Manhattan.

Here, they work trends within the larger economy and specific industries into the analysis.

An interesting thing the author notes is how here in New York assets are being converted into tradable securities and that this growth in the securities industry helps fuel demand of office space.

He also answers a question that came up in an earlier post regarding whether the fact that Manhattan is running out of office space will spark development. The author states:

To date, pace of new office development has been moderate. Land and property prices have been driven upward over the last four years, lowering the prospective returns on New York City's office sector and holding down speculative development.

The author continues that the Downtown and Midtown South sub-markets are going in the direction of luxury residential development. Meanwhile, the Midtown sub-market is being snapped up by the hedge fund and private equity industries.

All of these forces combine to continue to make Manhattan yet more and more expensive for both individuals looking to rent or buy a residence in Manhattan as well as businesses located in or wanting to locate in Manhattan.

I still think it would be worthwhile for businesses to consider the outer boroughs and for developers to consider developing these areas for office space. So far I have not heard of a compelling reason not to at least look into it.

The article is in .pdf format, so to read the article follow this link: http://www.newmarkkf.com/research/whitepapers/library/NYC_Thrives_In_Global_Economy.pdf