What We Heard: NY State of the Market

RDM was in attendance at Bisnow's 5th Annual NY State of the Market event.  The event, which RDM was a sponsored, brought together the top real estate figures of New York, as well as top national figures, who spoke about the current state of the market and key trends.

The panel included professionals from Avison Young, Massey Knakal, Himmel + Meringoff Properties, Colliers International, Cushman & Wakefield and MHP.

These are some of the nuggets of information shared:

- Bruce Mosler (Cushman): NYC is a story of sub markets - the financial sector is still on the sideline, while Midtown is improving.  Owners need to make capital improvements in order to stay relevant to changing tenants demands such as column free floor plates, natural light and connectivity.

- Arthur Mirante (Avison): Has a cautious view of the NYC real estate market but on a global level believes there is a need to celebrate. The fundamentals in NYC are the best in the world even though the financial service sector has been stagnant.

- (AM): NYC is hot & popular today - it's perceived as safe, which is benefiting real estate big time. People want to study, live, and work here where not so long go people were fleeing.

- Office space in NYC is not being built on spec - this isn't common in other markets.

- Tech, Advertisement, Media, & Information Sectors (TAMI) are driving NYC's office market -- these sectors are comprised of a younger generation who want to be in NYC.

- (BM): Sees a rent spike on Avenue of the Americas by the end of the year, this portion of office block was greatly affected by the downturn.

- (AM): Sees rents going up by 20 to 40% over the next couple years, depending upon the sub market, and thinks we can support another 20m SF of office space.

- Risks to the NYC office market include the mayoral election, rising interest rates, national government, etc. However office market fundamentals have never been better.

- Most important thing landlords need to do to lease space is modernize their buildings - tenants want to attract and retain their talent.

- Leslie Himmel (Himmel) sees interests rising along with cap rates, Robert Lapidus (L&L) doesn't see cap rates rising because there's too much money out there looking to buy in NYC.  Investors want inflation protection and NYC is still a top market for this.

- From a CRE view safe streets should be the biggest priority for the next mayor.