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New York City’s economy continues to diversify this cycle

• Recent labor market diversification is causing seismic changes in local office fundamentals.

• Employment in financial activities has barely recovered to its pre-recession levels, and the legal services sector
has been on a slow but steady decline. Traditionally, these two sectors have been the primary drivers of New York’s economy.

• In the same period, the technology, healthcare, and professional business services sectors have all experienced massive growth in employment, with commensurate increases in office occupancy. These industries are now at the forefront of New York’s economy, and are increasingly shaping demand for office product.

• Technology in particular has had significant influence on the office market, with competition over a relatively small pool of highly skilled talent steering firms towards employee-friendly, new and newly renovated product in Midtown South. This development has caused an explosion in rents and new development in that market.

Source: JLL Research , BLS, Moody's Analytics

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