Skip Ribbon Commands
Skip to main content

News release


JLL Reports New York’s Trophy Buildings Continue to Outperform Larger Market

Fall 2014 New York Skyline Review finds Midtown trophy rents at highest level in 3 years; Downtown trophy vacancy rates drop 37%+ in just 12 months

NEW YORK, January 21, 2015 — While Manhattan’s growing economic diversification into high-tech and other creative industries is welcome news for the larger economy, financial and legal services continue to drive occupancy and pricing at the top of the market, according to JLL’s fall 2014 New York Skyline Review. The majority of New York’s most expensive properties remain clustered around the Plaza District, but high prices have spread south to Bryant Park and west to Columbus Circle and Times Square.

JLL found that pricing at the top of the market continues to reach, and surpass, the strongest levels seen since 2008. By fall 2014, Manhattan had recorded 99 transactions with rents starting at $80 or greater, up from 86 in 2013 and 51 in 2012. More than 23 properties now post direct asking rents greater than $100 per square foot, compared to 21 in spring 2014 and 14 in spring 2013. Within this category, an even smaller set of buildings with Central Park views commands rents averaging around $145 square foot.

While accounting for a minimal amount of the overall velocity — the median size of leases in this micro-market averaged approximately 11,500 square feet in fall 2014, up from 10,000 square feet one year before — these transactions fuel industry chatter and are said to provide benchmarking for the rest of the trophy market.

The city’s top-end office buildings posted an overall rate hike of 4.2 percent to $79.18 per square foot in fall 2014 from $76.02 per square foot six months earlier. New York’s trophy product saw rents increase 9.5 percent from $72.33 per square foot one year earlier.

“Despite recent fluctuations, stock market indices have posted large gains since 2009, promoting renewed confidence, higher assets under management and strong demand for Manhattan’s best-quality space,” said Peter Riguardi, president of JLL’s New York tri-state operations. “One of the most prominent themes in Manhattan has been relocation and migration, with many tenants opting for space that fosters efficiency, value and employee retention and recruitment. This movement has impacted Downtown, in particular, where the largest trophy transactions were completed by firms migrating from elsewhere in Manhattan.”

Vacancy rates for Lower Manhattan’s trophy buildings fell to 15.4 percent in fall 2014 from a record high of 24.5 percent just 12 months before. With Brookfield Place largely rented — vacancy rates at the five-building complex dropped from 32.5 percent to 5.0 percent in 12 months — Downtown’s trophy availability is now limited to new product at the World Trade Center and other more established properties.

Pricing for Lower Manhattan trophy office buildings is approximately 33 percent lower than Midtown. New space at the World Trade Center offers trophy-quality space and world-class views at pricing comparable to commodity Class A space in Midtown.

JLL found that average asking rental rates for Lower Manhattan’s trophy office product have reached levels not recorded since spring 2009. Downtown rates totaled $64.06 per square foot in fall 2014, 4.6 percent above $61.24 per square foot six months earlier and 7.5 percent higher than $59.58 per square foot a year ago.

Nearly half of all Midtown high-end buildings recorded a direct vacancy rate of 5.0 percent or less in fall 2014, with tower floors — the 25th floor and above — posting a vacancy rate of just 4.6 percent. Options for trophy-quality space in Midtown will remain limited for the next few years. Two office towers under construction in Midtown are slated to be delivered next year. The 474,000-square-foot 7 Bryant Park is expected to hit the market in first-quarter 2015 and the 1.7 million-square-foot 10 Hudson Yards, the first tower of the Related Cos. Hudson Yards District, could be open as early as next summer.

Another 6.6 million square feet of office product is expected to be delivered by 2018, including the 2.6 million-square-foot 30 Hudson Yards, and 1 Manhattan West and 2 Manhattan West, which total around 4 million square feet. While it may seem like a great deal of office space is under construction, the total amount underway represents just 2.6 percent — or 11.64 million square feet — of Manhattan’s existing inventory.

“The outlook for financial services activity in Midtown has begun to slowly improve, with the sector recording small but noticeable gains in employment,” said Riguardi. “Year-over-year, financial services jobs grew 1.7 percent in September and some of New York’s largest banks are back in the market. High-end financial services firms, including an increasing number of foreign funds, will continue to view the Plaza District as one of the premier locations in New York.”

The fall 2014 Skyline Review reported that average asking rental rates for Midtown trophy product have risen steadily during the past year. The submarket continued to post trophy rents above $90 per square foot, after exceeding that figure six months ago for the first time since spring 2008. Midtown trophy rates rose slightly to $90.73 per square foot in fall 2014, increasing less than 1.0 percent from $90.49 per square foot six months earlier. The submarket saw trophy rents expand 5.3 percent from $86.16 per square feet one year earlier.

Jones Lang LaSalle's Skyline Review is a proprietary report that analyzes the premier buildings in Midtown and Downtown Manhattan — those buildings that truly move the market. The company's New York Skyline Review includes buildings that meet one or more of the following criteria: built or significant renovations since 1985, high-profile location, recognized tenant profile and/or architectural significance. Some buildings do not appear in the New York Skyline Review but are tracked for statistical purposes as part of the inventory of trophy buildings.

JLL is a leader in the New York tri-state commercial real estate market, with more than 1,600 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2013, the New York tri-state team completed approximately 25.9 million square feet in lease transactions, arranged capital markets transactions valued at $2.1 billion, managed projects valued at nearly $7.0 billion, and oversaw a property and facilities management portfolio of 95.3 million square feet and an agency leasing portfolio of 67.0 million square feet.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $53.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit​