Five years after the horrific events of 9/11, the commercial real estate market in lower Manhattan still faces an uncertain future, according to Marisa Manley, President of Commercial Tenant Real Estate Representation Ltd. At 112%, the vacancy rate is more than double Midtown’s, and average rents in lower Manhattan are 37% below those in Midtown. In effect, one of every 10 floors of office space in lower Manhattan is vacant, yet ample choice and lower rents are not sufficient to attract new tenants.
Despite this, state and federal governments are promoting the construction of buildings which will add another 8.8 million square feet of space to the market – likely to further increase vacancies and depress the market.
“By subsidizing office space for which there is little private sector demand, and then filling some of this unwanted space with government employees, government agencies are repeating past mistakes and burdening tax payers with hundreds of millions of dollars in excess taxes – perhaps more than a $1 billion — over the next decade,” Manley says. “The government needs to step aside and let natural market forces shape the future of the Freedom Tower and other office space located at Ground Zero.”
Commercial Tenant Real Estate Representation, Limited is a real estate consulting and brokerage firm which represents corporate tenants to help them reduce
occupancy costs and protect their long-term interests.