Top 10 Northeast Markets for Office Deliveries in 2019
- Mar 02, 2020
Some 17 million square feet of office space was delivered in the Northeast region during 2019, according to Yardi Matrix data, with more than 15.5 million square feet concentrated in the markets on our list. Manhattan predictably led activity and, with the ongoing development at projects such as Hudson Yards, will continue to dominate the landscape moving forward. On the other hand, office deliveries in Brooklyn and Queens accounted for the largest increase as a percentage of total office stock.
Four buildings totaling 333,330 square feet were delivered in 2019 in the Rhode Island market, 1.3 percent of total stock (25.8 million square feet). The market’s office inventory consists of predominantly old and historic buildings, which led to the rapid absorption of new supply.
The majority of the assets—including Innovate Newport in Newport and Point225 in Providence—are home to various life sciences businesses and have become innovation centers, while others such as Blackstone Valley Neighborhood Health Station in Central Falls are owner-occupied medical office buildings.
The Harrisburg market’s office inventory is slightly larger than Providence’s (26 million square feet) and so are its 2019 office deliveries (366,300 square feet). Two properties are located in Lancaster, Pa., with the other two scattered around the market. The types of delivered assets were diverse and included medical office buildings—WellSpan Health & Surgery Center in Hanover, Pa., and City Gate Corporate Center in Lancaster, Pa.,—or office campuses and corporate centers. The largest building is 101 North Queen in Lancaster, Pa., a 150,000-square-foot redevelopment of the former Bulova Building owned by Zamagias Properties.
8. New Jersey
Development activity was tempered in New Jersey, where only a 450,000-square-foot office building came online in 2019. The Edison Properties-owned project, now called Ironside Newark, is an adaptive reuse project of the former Newark Warehouse Co. Building, also known as the Central Graphic Arts Building.
Designed by Perkins Eastman, the property includes more than 75,000 square feet of retail space on the first and second floors. Additionally, Ironside Newark is home to the offices of Mars Wrigley Confectionery, Edison Properties and Robinson Miller, among others.
Over the last twelve months, the market has seen new deliveries of 490,650 square feet across four properties (a 1.9 percent increase in total stock). Two of the assets are located in the suburbs and are fully occupied by businesses from the medical sector. The remaining properties—which are also the largest—are located in downtown Buffalo, N.Y., and include residential and retail space. The largest delivery is Ellicott Development’s 500 Pearl Street, a 194,500-square-foot asset that includes 14 residential units, five floors of above-ground structured parking and a hotel component.
A little over 658,000 square feet of office space came online in Pittsburgh throughout 2019. Demand was fueled by universities as well as the growing information technology, artificial intelligence, robotics and health-care sectors.
Completions included corporate headquarters such as Continental Real Estate Companies’ 275 N. Shore Drive, a 200,000-square-foot premier property in Pittsburgh’s Greater Downtown submarket, research & development facilities—D15trict Fifteen, also in downtown Pittsburgh—or medical office buildings—Heritage Valley Center Township Medical Neighborhood in Monaca.
The market’s office inventory encompasses 22.3 million square feet, out of which 1.2 million square feet was delivered in 2019, equal to a 5.4 percent uptick in inventory. Developers have started to take advantage of Queens’ untapped potential for construction, with Amazon HQ2 putting it on the global map. Development activity was concentrated in the Long Island City and Flushing submarkets. The largest delivery was Innovo Property Group’s Bridgedale Plaza, an 828,558-square-foot redevelopment of a former warehouse.
Last year’s construction activity in the Philadelphia market was one of the slowest in a decade, with 1.6 million square feet of office space added to inventory. Two of the completed assets are situated in Philadelphia’s Center City District. Most deliveries are owner-occupied green buildings such as Triad1828 Centre in Camden, N.J., 2400 Market Street in Philadelphia and Vanguard Campus – Neptune Building in Malvern, Pa.
The largest delivery—2400 Market Street—comprises 538,421 square feet of office and 70,000 square feet of retail space. Owners Lubert-Adler Real Estate Funds and PMC Property Group broke ground on the project in early 2017.
Nearly 2 million square feet of office space came online in Boston in 2019. Despite its massive 268.8 million-square-foot office inventory, the market recorded slow yet steady development activity throughout the last four years. The biopharma, life sciences and technology sectors continued to drive demand, with most delivered properties being amenitized build-to-suit and speculative projects. Boston Properties-owned Akamai Global Headquarters was last year’s largest office delivery, a 453,768-square-foot green building in Cambridge.
With 2.8 million square feet of office space delivered in 2019, Manhattan’s neighbor has started to live up to its true potential. Last year’s deliveries represent a 7.4 percent increase in total stock. The borough’s industrial past left multiple vacant factories and warehouses behind.
Developers and investors took advantage of the increasingly popular adaptive reuse trend and have started to transform obsolete buildings into modern, industrial-chic office projects, which act as a catalyst for Millennials, startups and mid-sized companies from the tech, media, fashion and design industries. Notable conversions include New Lab 77 Washington in the Navy Yard megacomplex, The Breeze in the Williamsburg–Greenpoint submarket and Sunset Yards in the Bay Ridge–Sunset Park submarket.
The first entry on the list comes as no surprise. With 5.7 million square feet of office space added to the market in 2019 alone, Manhattan continues to be the Northeast region’s top market. Deliveries account for a 1.1 percent increase in the total stock of 498.8 million square feet.
Construction activity was concentrated in Midtown and Midtown South, particularly in the Chelsea and Times Square–Hells Kitchen submarkets. Two properties encompassing more than 2 million square feet each came online in 2019, both in Chelsea. The largest is Related Cos.’ 30 Hudson Yards, a 2.8 million-square-foot asset that took four years to reach completion. The property is part of the recently opened Hudson Yards.
Yardi Matrix covers office properties of 50,000+ square feet in markets across the United States. This ranking reflects deliveries of properties within that sample group.