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Slow, Steady Growth Unlikely to Crash Office Rents

The market for office space Manhattan is not acting like a boom market about to crash.

“A sharp decline in the next downturn is unlikely,” according to the latest research and analysis from Jones Lang LaSalle. “There is always, eventually, a next economic downturn — but the growth in office rents has simply not sped up enough so far to crash very hard.”

So far in the current expansion, Manhattan office rents grew at a slow, steady compound annual growth rate of 4.5%. Just to compare, in the expansion before the crash in 2000, Manhattan office rents grew at a frantic compound annual rate of 13.8%. In the expansion before 2008, that rate was 13.5%.

Also, rents for office space in Manhattan grew in 18 of the last 23 years. That’s an indication that any possible decline in rents would be short lived, according to JLL.

For comments, questions or concerns, please contact Bendix Anderson

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