Job growth boosts market for NYC real estate

Crains

Job growth boosts market for NYC real estate
by Julie Satow

The number of high-paying office jobs in the city skyrocketed in 2005, driving businesses to lease additional space to accommodate workers and tightening the commercial real estate market.

According to a third-quarter market report by Colliers ABR, private sector employment jumped by 46,800 jobs through the first nine months of this year, more than double the number of jobs gained in all of 2004.

The extra jobs pushed the Manhattan vacancy rate down to 9.9%, the first time it has dropped below 10% in more than four years. Sublease space has also shrunk to 11.1 million square feet, the lowest level in over three years. Asking rents rose to $41.92 a square foot in September, up from $38.86 a year ago.

The trend is likely to continue, the report said.

�Beyond the end of 2005, look for the local New York City economy to expand at a modest but steady pace,� said Robert Sammons, the head of research at Colliers ABR and the author of the report. He expects the gross metro-area product to increase by 2.5% to 3% in 2006 and employment to increase by 1% to 1.5%.

�Barring any national catastrophes, the area�s outlook-including commercial real estate-should continue to perform well over the next year,� he said.


�2005 Crain Communications Inc.