Manhattan is poised to add the most office space in any three-year period since 1990 as projects including buildings at Hudson Yards and the World Trade Center site are completed, the New York Building Congress said.
The borough, home to the largest U.S. office market, probably will add 9 million square feet (836,000 square meters) of office space at nine development sites from last year through 2015, according to the organization, which promotes construction in the New York City area. An additional 10 million square feet at six buildings is likely to become available from 2016 through 2018, the group said in a statement today.
“It’s a vote of confidence in the market, which we think is long overdue,” Richard T. Anderson, president of the New York Building Congress, said in a telephone interview. “As a global center of finance and office-related functions, the city needs to regenerate its office space.”
Office-using jobs in New York City last year surpassed the 1.8 million mark for the first time, an increase in demand that’s helping support the construction boom, the group said. The estimates through 2018 include planned towers at 2 and 3 World Trade Center in lower Manhattan, where office leasing has exceeded the five-year average in each of the past 12 quarters, real estate brokerage CBRE Group Inc. said in an April report.
A total of 24.4 million square feet of new office space is expected to be built from 2010 through 2019, more than the 19.4 million square feet added from 2000 through 2009 and the 10.7 million square feet delivered in the 1990s, the Building Congress said. This decade’s total will be about half of the 49 million square feet completed in the 1980s, the group said.
Filling the added office space may be a challenge, with slowing job growth in office-related industries including finance, insurance and law, Anderson said. Also, the amount of space occupied by each Manhattan office worker is dropping to about 200 square feet per worker in newly built and renovated buildings from 250 square feet, a sign of cost-cutting by employers, according to the Building Congress.
Renovation remains the dominant source of office construction, making up 70 percent of development spending, the group said.
Lower Mahattan’s 3 World Trade Center is stalled at eight stories while government officials and developer Larry Silverstein work on a plan to finance the 80-story tower. He is seeking an anchor tenant to justify the construction of 2 World Trade Center.