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Manhattan Office Sales Dip 12% Y-o-Y in Q4 2019

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Sales activity in the Manhattan office market decreased 12% year-over-year, with total sales volume dropping to just under $2.8 billion. After gaining significant traction in Q3, Manhattan office sales dropped by more than $1 billion quarter-over-quarter.


  • Y-o-Y, the average price per square foot increased to $875, and roughly 3.3 million square feet of office space was traded—about 17% less compared to Q4 2018.
  • Overall office asking rents increased year-over-year, reaching an average of $84.95 per square foot by the close of the quarter.
  • The largest office deal in Q4 2019 in Manhattan was the sale of 330 Madison Avenue, which traded for $875 million.

Read the full breakdown of the report below.

Manhattan Office Sales Dip 12% Y-o-Y in Q4

Year-over-year, Manhattan office sales dropped by more than $380 million, a 12% decrease. In total, roughly $2.8 billion worth of office properties was traded in the fourth quarter of 2019, with an average price per square foot of $875.

Likely contributing the most to this Y-o-Y decline was the huge drop that occurred quarter-over-quarter—sales dropped more than $1 billion. Furthermore, the average price per square foot also dropped 40%. This was mostly due to the two large office sales that took place in Q3, namely the double sale of the iconic Coca-Cola Building.

Approximately 3.3 million square feet traded hands in the last three months of 2019, down 17% compared to the same time period last year; however, quarter-over-quarter numbers were up 5.7%.

Q4 Has the Most Closed Office Deals in 2019

In Q4, there were a total of 13 office deals in Manhattan, the largest of which was the sale of 330 Madison Avenue in Midtown; Munich Re acquired the property for $875 million from Abu Dhabi Investment Authority in December.

Built in 1965, the LEED Gold-Certified office building is a 39-floor high-rise with retail and restaurant components. The building encompasses 840,000 square feet of space, of which 819,635 is available for office use. Prominent tenants include JLL, Guggenheim Partners and HSBC.

Other major deals include the $365 million sale of 589 5th Avenue and the $270 million sale of 175 Water Street.

Class A+ Office Space Ends Q4 with $106.30 Asking Price

Asking rents increased across all office types in Q4. Overall, asking rents for full-service office leases reached an average of $84.95 per square foot across all office types at the end of the quarter, a 2.7% increase since September. However, it was Class B office spaces that enjoyed the largest increase in rents; they rose 5% to $65.29 per square foot.

At $106.30 per square foot, Class A+ asking rents rose 3.6% since the end of September, while Class A office spaces increased 2.7% to $75.06 per square foot at the end of the year. Rents for Class C office type spaces also increased by 2.3%.

Office Vacancy Hits 7.8% to Close Out 2019

Overall, office vacancy ended Q4 at 7.8%, up from 7.1% in the previous quarter. The most notable increase in occupancy was seen in Class C office spaces, where occupancy reached 94.2%.

Class A+ properties went from 5.4% to 6.6% vacancy, while vacancy for Class A office spaces increased from 8.6% to 8.9%. Class B offices reached a 92.5% occupancy rate.

One Manhattan West Comes Online in Q4

Two office projects were completed in Manhattan in October 2019. The first was One Manhattan West, a 2-million-square-foot high-rise in Chelsea. The 67-floor tower is a LEED Gold-Certified building with a Class A+ rating. Brookfield Properties owns the property and leasing is handled by Cushman & Wakefield.

The other project is 35 Hudson Yards, a 557,000-square-foot high-rise also located in Chelsea; the trophy building has 72 floors and a Class A+ rating. In addition to office spaces, it also encompasses medical offices, shared spaces, retail and a restaurant. The building is owned and managed by Related Companies.

2.9 Million Square Feet on Track for Delivery in Q1 2020

Top deliveries for Q1 2020 include the 1.1-million-square-foot David H. Koch Center for Cancer Care, which was just completed in January. The 25-floor, mid-rise property is located on the Upper East Side and consists of office and medical office spaces.

Other large projects due in Q1 are Pier 57 in February, and 25 Park Row, Trinity Commons and The Malt House in March.

Smaller office developments pending in Q1 include 330 East 62nd Street, 60 Charlton Street, The Warehouse and 44 Union Square. With the exception of 330 East 62nd Street, which is roughly 110,000 square feet in size, these upcoming projects are all less than 100,000 square feet.


For this report, we used detailed Yardi Matrix data to analyze all office transactions with price tags equal to or exceeding $5 million that closed in Manhattan during the fourth quarter of 2019.

Our sales analysis—based on data recorded through January 10, 2020—includes completed office buildings equal to or larger than 50,000 square feet that changed owners during the quarter. In the case of mixed-use assets, only properties featuring more than 50% office space were taken into account.

Portfolio deals were evaluated as single transactions; distressed sales were excluded altogether.

To ensure the trends and comparisons presented in our analysis were valid, we excluded portfolio, partial interest and ground lease deals from our calculation of the average price per square foot.

Lease rate, vacancy and coworking space data refers to buildings equal to or larger than 25,000 square feet. Lease rates listed were averaged to the asking full-service-equivalent rents per square foot for spaces recorded in Yardi Matrix as “available” through January 10.

While every effort was made to ensure the timeliness and accuracy of the information presented in this report, the information is provided “as is” and neither CommercialCafe nor Yardi Matrix can guarantee that the information provided is complete.

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