Survey: New York Office Space a Global Bargain

Among the world’s great headquarter markets, New York City’s Midtown Manhattan ranks tenth for office occupancy costs, according to the latest edition of an annual survey conducted by Cushman & Wakefield Inc. The report, titled Office Space Across the World 2008, cites New York’s occupancy costs–a combination of rent, taxes, and utility–at an average of about $100 per square foot, a bargain according to Cushman & Wakefield. By comparison, London, which ranked first in the survey, averages $312 per square foot of office space. At $238.58, Hong Kong placed second and was followed by Tokyo ($210.12), Mumbai, India ($166.04) and Moscow ($158.72), to round out the top five. The cities that made the list are generally global office locations favored by multi-national corporations, according to Maria Sicola, executive managing director, research, with Cushman & Wakefield. “These CBD markets appeal to multinationals because they have a significant presence of financial services companies–that is the driving trend in cities that attract global tenants,” Sicola (pictured) told CPN today. Tenants seem eager to locate in Manhattan. During the last quarter of 2007, despite the slowing national economy, the vacancy rate for Manhattan office space fell to 4.5 percent from 4.9 percent in the previous quarter and from 6.8 percent in the fourth quarter of 2006, according to research conducted by Grubb & Ellis Co. The Cushman & Wakefield survey also found that office rents increased by an average of 40 percent during 2007 in the ten most expensive cities, including New York. Of 203 locations in 58 countries surveyed by Cushman & Wakefield, 79 percent showed increases in rents last year; 20 percent showed stable rents, and 1 percent showed a decline in rents–last year 6 percent of the respondents said rents had declined. Across all of the locations, rents grew by an average of 14 percent during 2007, compared with 10 percent in 2006.Other expensive U.S. markets noted in the survey include Boston ($78.87), Washington, D.C. ($61.93), and Downtown Manhattan ($66.12). Way down the list of U.S. cities are Dallas ($29.12) and Atlanta ($24.50).