The pandemic hasn’t hampered New York City’s supply of new office construction yet, but that time appears to be coming soon enough.
Developers have started office projects totaling 2.1 million square feet since the beginning of 2021, according to Commercial Edge data reported by GlobeSt. That number is well below the 3.2 million square feet of office construction starts in 2019 and the 5.7 million square feet of office construction starts in 2020.
There are 19 million square feet of office construction underway in Manhattan, according to the report. New construction is trailing new deliveries, meaning the office market could be in line for an office shakeup.
Deliveries are expected to surpass supply in both 2022 and 2023, increasing the supply of office stock by 4 percent, according to Globe St. After that, however, office deliveries will likely begin to fall off in 2024, a decline that may continue through 2027.
The data comes as the city is still trying to navigate office life in the wake of the pandemic. Manhattan office availability hit a peak of 17.4 percent in February, according to Colliers, as workers in the city don’t appear to be eager to return from remote work arrangements.
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Slightly under 94 million square feet of office space was available to rent in Manhattan last month, according to Colliers. Availability last month was up 74 percent since the start of the pandemic, despite a doubling of demand from a year ago.
While office construction starts are slipping in New York, there’s life in other markets, according to GlobeSt. Dallas and Austin combined for 15 percent of all office starts in the nation last year, according to the Commercial Edge report. Miami, Nashville and Raleigh-Durham were among the other markets to see an increase in office construction.
[GlobeSt.] — Holden Walter-Warner