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New Office Builds Reap Benefits of Tenants’ Flight to Quality
Manhattan office is in the midst of a multi-year building boom not seen since the early 1990s. As might be expected, this is making its mark on leasing, as Savills notes in its first-quarter report.
“Well in advance of lease expirations, large tenants continue to seek high-quality space, often upgrading and densifying to attract young and well-educated talent,” the report states. “Hudson Yards provides an obvious example as tenants are now competing for remaining new and trophy-quality space within the development.”
The effect isn’t limited to the Far West Side. “Tenants including Phillip Lim, Casper and Hello Fresh are all trading Midtown South locations for newer construction Downtown,” according to Savills.
For buildings scheduled to come on line within the next 12 months, pre-leasing stands at 71.1%. Outside of the sought-after new properties, Savills says, “Availability is expected to increase as a result of the flight-to-quality trend.”
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