I wrote yesterday that the Manhattan office market may face problems in 2008. But, in the worst-case scenarios, the Manhattan market would remain strong. One gauge of that strength comes from looking just beyond the borough’s borders, at other office markets.
The Manhattan office market, should the borough lose 50,000 or so office-based jobs this year, would see a rise in the vacancy rate to about 10 percent, according to a recent report from brokerage Colliers ABR. That rate would still be below that of Jersey City, Fairfield County, Conn., and Westchester County.
For example, the vacancy rate for Class A space in Manhattan–the most expensive type of space, generally clustered in those fine Midtown towers–was 5.3 percent by the end of 2007. In Jersey City, the Class A vacancy rate was 11.8 percent, the lowest there since mid-2004; in Westchester, it was 20.2 percent, the lowest in a year; and, in Fairfield, it was 16.5, near the lowest quarterly figure ever of 15.2 percent, reached in 2001.
Manhattan, then, even in a market downturn, would likely remain healthier–from a landlord’s perspective–than its closest competitors.