Q4 2019

MANHATTAN
MARKET
IN
MINUTES
Savills Research

2019 crowns Manhattan as one of the world’s KEY STATISTICS

primary tech centers Q4 2018 Q4 2019
y-o-y
Change

Fourth-quarter leasing activity stood at 12.6 million square feet (msf), bringing total Inventory 445.7 MSF 452.9 MSF

2019 leasing to 41.5 msf and outpacing last year's total of 40.4 msf. The technology, Availability Rate 10.7% 11.1%
advertising, media, and information (TAMI) sector drove more than 35.0% of yearly
activity. FAANG (Facebook, Amazon, Apple, Netflix and Google) tech giants alone Class A Asking Rental Rate $87.90 $97.76

leased more than 3.3 msf in Manhattan this year. During the quarter, Facebook Class A Taking Rental Rate $77.67 $81.63
concluded a search for a new local headquarters, leasing 1.6 msf across 50, 30, and 55
Hudson Yards. With this new lease, Facebook now occupies 2.6 msf in Manhattan. Quarterly Leasing Activity 11.8 MSF 12.6 MSF

Amazon also secured an additional 335,408 square feet (sf) at SL Green’s 410 Tenth
Avenue in Hudson Yards this quarter. This lease is Amazon's largest expansion in New
York since the backing out of its planned Long Island City HQ2 earlier in the year. ASKING RENT TRENDS
Overall Asking Rent Class A Asking Rent
$120.00
Robust development brings new options and record-setting $97.76
concessions $100.00

More than 21.0% of all 2019 leasing was in new product; in the fourth quarter law firm
$80.00
Debevoise & Plimpton LLP signed for 530,720 sf at Hudson Yard's The Spiral, law $ / SF $82.61

firm Cravath, Swaine & Moore signed for 480,492 sf to anchor new development Two $60.00
Manhattan West, and advertising giant Dentsu (322,000 sf) chose to relocate to the
$40.00
future redevelopment of Morgan North. A robust pipeline and tenant consolidations
to new space are factors in the increase in overall availability, which ended the $20.00
quarter at 11.1% - up 40 basis points over the year. Newer product has helped subsidize
an increase in Class A asking rents, now at $97.76 per square foot (psf); however, $0.00
Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019
increased concessions are keeping tenant effective rents flat. Concessions for new,
long-term, Class A leases in Midtown and Midtown South currently average $195.75 AVAILABILITY TRENDS
psf in combined free rent and improvement allowance – up 6.0% over the year and the Overall Availability Class A Availability
15.0%
highest recorded amount in Savills history.
11.3%
Downtown thrives, pulling in significant tenant relocations from
Midtown and Midtown South 10.0% 11.1%

The Downtown office market thrived in 2019, seeing 9.5 msf of leasing activity
over the year – a five-year high – and a resulting 420-basis-point drop in Class A
availability (now 11.6%). Two significant leases were signed at 3 World Trade center: 5.0%
Uber consolidated locations to 307,970 sf and law firm Cozen O’Connor is relocating
Midtown offices to 77,187 sf at the building. With an average Class A asking rent of
$68.98 psf, Downtown offers a 30.0% - 50.0% rent discount to Midtown ($103.41 psf)
0.0%
and Midtown South ($133.42). Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019

LEASING ACTIVITY
Outlook Quarterly Leasing Activity 5-Year Quarterly Average
14.0
• Demand from flexible office providers dropped from 16.6% of Q1
12.0
activity to just 1.6% in Q4 and will continue to be muted as effects of
Square feet (millions)

WeWork’s fallout take hold 10.0

• WeWork is no longer leasing large blocks that others wouldn't, which 8.0

could push availability up - particularly in existing product - as the 6.0

pipeline remains active and tenants shift to newer space
4.0
• Competition for new space will remain high with FAANG and top-tier
2.0
TAMI tenants willing, and able, to out-pay for premium new product
0.0
Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019
 Manhattan Market in Minutes - Q4 2019

TOP 10 LEASING TRANSACTIONS

6 of 10
top transactions were relocations or
49.2%
TAMI tenants accounted for 49.2% of
47.4%
of major transactions occurred in
new locations top transactions by square footage Hudson Yards by square footage

Tenant Square feet Address Transaction type Submarket Industry

Facebook 1,578,860 50, 30, and 55 Hudson Yards New Location Hudson Yards TAMI

Morgan Stanley 1,342,288 1 New York Plaza Renewal and Expansion Financial District Financial Services

Debevoise & Plimpton LLP 530,720 66 Hudson Boulevard Relocation Hudson Yards Legal Services
For more information,
please contact us:
New York State Office of
523,000 60 Broad Street Renewal and Expansion Financial District Government
General Services
Savills
Penn Plaza/Times
LinkedIn Corporation 494,183 350 Fifth Avenue Renewal and Expansion
Square South
TAMI 399 Park Avenue
11th Floor
Cravath, Swaine & Moore LLP 480,492 Two Manhattan West Relocation Hudson Yards Legal Services
New York, NY 10022
+1 212 326 1000
Amazon 335,408 410 Tenth Avenue New Location Hudson Yards TAMI

Dentsu Aegis Network 322,000 Morgan North Relocation Chelsea TAMI Mitchell S. Steir
Chairman and
Uber 307,970 3 World Trade Center Relocation WTC/Brookfield Place TAMI
Chief Executive Officer
+1 212 326 1000
Macquarie 262,087 125 W 55th Street Renewal Columbus Circle Financial Services
msteir@savills.us

Source Savills Research

Mitchell E. Rudin
President
+1 212 326 1000
AVAILABILITY RATE COMPARISON RENTAL RATE COMPARISON ($/SF) mrudin@savills.us
Manhattan Submarkets Manhattan Submarkets

Sarah Dreyer
Hudson Square 4.5% Hudson Yards $131.80 Vice President,
Hudson Yards 5.4% Plaza North $130.80
Head of Americas
Flatiron 6.6% Greenwich Village $111.91
Union Square 6.6% Hudson Square $105.23
Research
Midtown South Total 8.5% Tribeca $98.53 +1 212 326 1000
Chelsea 8.8% Manhattan Class A $97.76 sdreyer@savills.us
Soho 8.9% Soho $95.29
Greenwich Village 9.6% Plaza South $89.45
Times Square 9.7% Midtown Total $87.83 About Savills Inc.
Plaza South 10.4% Times Square $86.87 Savills helps organizations find the
Grand Central 10.7% Grand Central $86.12 right solutions that ensure
Manhattan 11.1% Midtown South Total $84.34 employee success. Sharply skilled
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and fiercely dedicated, the firm’s
integrated teams of consultants and
Tribeca 11.4% Park Avenue South $82.50
brokers are experts in better real
Midtown Total 11.6% Union Square $81.07
estate. With services in tenant
WTC/Brookfield Place 11.8% Chelsea $77.54
representation, workforce and
Park Avenue South 11.9% Columbus Circle $77.52
incentives strategy, workplace
Financial District 11.9% East Side / UN $75.68
strategy and occupant experience,
Penn Plaza/Times Square South 12.0% Penn Plaza/Times Square South $71.87 project management, and capital
Downtown Total 12.0% WTC/Brookfield Place $70.31 markets, Savills has elevated the
East Side / UN 12.3% Downtown Total $65.57 potential of workplaces around the
Columbus Circle 14.5% City Hall $64.93 corner, and around the world, for
City Hall 14.5% Flatiron $64.55 160 years and counting.
Plaza North 17.8% Financial District $59.11
For more information, please visit
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Unless otherwise noted, all rents quoted throughout this report are average asking gross (full service) rents per square foot. Statistics are calculated using both
direct and sublease information. Current and historical availability and rent data are subject to change due to changes in inventory.

The information in this report is obtained from sources deemed reliable, but no representation is made as to the accuracy thereof. Unless otherwise noted,
source for data is Savills Research.

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