Commercial real estate in New York is home to numerous different types of businesses. New York is the headquarters for worldwide companies. The insurance, real estate and financial industries form the foundation of the economy in New York.
The overall commercial real estate market in New York is slowly improving. Credit remains tight, but because banks have been able to modify loans, extend and restructure the commercial property market has been given a chance to breathe and values have slightly increased. Although the values of commercial property rose in 2010, they are still far from their high in 2007.
The commercial office market is recovering after a few years of almost no construction. The retail market in Rochester continues to be active with planned construction in all submarkets. The market for industrial buildings also remained active, highlighted by the demand for quality buildings. Office movement in the Business District represents the best chance for market access due to attractive vacancies and assertive lease rates.
The asking rent per square foot in prime office space downtown is $21. The low was $18 PSF and the high was $33.00 PSF. The vacancy rate stands at 12.1 percent. The asking rent for prime suburban office space is $19. 40 PSF. The low was $16 PSF and the high was $23 PSF. The vacancy rate is 9.4 percent.
The asking lease rate per square foot for retail space for regional malls was $30 PSF. With a low of $18 PSF and a high of $50 PSF. Service center space average lease rate was $12 PSF and community center space averaged $16 PSF. High Tech industrial property asking lease rate was $8 PSF with a high of $10 PSF and a low of $6 PSF.
New York City
The office market in Manhattan is on an upward trend. Recording a positive absorption of 1.4 million SF. Overall the vacancy rate has decreased to just fewer than 12.7 percent. With increasing absorption and vacancies falling, Midtown continues to drive a recovery. Asking lease rates went up to $ 49.41 PSF, which was driven by leasing prime space.
The downtown market has seen rising vacancies, falling rent and negative absorption, but this is less than previously seen. Since the last quarter lease rates have increased 1.3 percent to $23.34 PSF, but for the year they have declined by 1.8 percent. The low was $22. 86 PSF in July and the high was in 2008 at $ 30.41 PSF. The total available space has increased by 6.3 percent.
Retail property lease rates peaked in 2009 at $34.92 PSF. The average lease rate currently is lower by 13.9 percent. The low is $25.93 PSF set in February. The available space for lease represents a 5.9 percent decline this year.
Office property asking price was $192.58 PSF. This represents a decline of 6.5 percent yearly average and a 0.7 percent drop from last quarter. The lowest asking price 4 was 194.51 PSF and the high was $241.03 PSF in 2008.
The sale price for office property has declined by 0.2 percent reaching $200.81 PSF, over this last year. The number of properties for sale has been increasing and the current available properties for sale represents a 4.2 percent increase from last year.
In 2008, the asking price for retail property was at their highest at $253.27 PSF. Currently the price is 14.9 percent lower. In August the asking price of $211.95 PSF was the lowest in three years. The average sale price was $244 PSF in 2008. Currently the average sale price is $234.96 PSF down by 3.6 percent.
Programs and Incentives
Known as a Pro-Business state, New York has built a strong economy through effective partnerships and is committed to being a business partner. Business is a top priority and commercial real estate offers many incentives for businesses to grow and develop. There are many various tax reductions, incentives and tax credits, financing and discounted energy programs that are available to both large and small businesses.
A few of the more popular tax incentives include programs such as the commercial expansion program, which offers tax reductions for leases in targeted regions. The relocation credit offers a credit for commercial businesses to relocate to specific areas of New York. Additionally, there is the sale and use tax exemption, which offers exemptions for build-out costs for leases that are eligible. The empowerment zone incentive offers funds and tax reductions for business development and investments.
These valuable programs have made it possible for commercial real estate in New York to create the ideal business environment for businesses of all types.