Effective rent growth has been largely driven by newly constructed and renovated properties
In 2019, new construction and renovated properties have captured a record share of leasing activity, most notably from major tech, finance, and legal services companies. Office occupiers have been incentivized to make commitments to modernized spaces that resonate and attract their target workforces.
- The current Manhattan office inventory is rather dated; only 11.7 percent of the existing office stock has been delivered since 1990. Therefore, the demand for new office product is causing excess net effective rent growth in the new construction segment.
- This influx of activity has incentivized landlords to invest in modest renovations to current properties throughout the city.