The Radio Tower and Hotel, the first completed US design by Dutch architecture firm MVRDV, has opened in Manhattan with colourful, irregularly stacked structures.

It was designed jointly by Dutch firm MVRDV and local firm Stonehill Taylor, who acted as the lead architect. The 23-story tower was completed this year and opened in September, four years after the project started in 2018.

The radio tower and hotel feature stacked colorful boxes

The primary occupier of the building in the Washington Heights neighborhood of Upper Manhattan is a 221-room hotel. The tower also contains a restaurant, shopping and office space for rent.

The different volumes of the building were dimensioned in such a way that they each have the same scale as the surrounding neighborhood buildings.

The building includes different rectilinear volumes

Each was also clad in a different color of brick, ranging from yellow, blue, orange, and green. According to the architects, this prevents the building construction from “overwhelming” the adjacent streets.

“The property is designed to stand out from the crowd and serve as a welcoming beacon for out-of-towners coming to Manhattan,” said Stonehill Taylor.

It is the first full-service hotel in Washington Heights, Manhattan

According to MVRDV, the colorful bricks in green, yellow, blue, orange and magenta also stand for the “diverse and lively” character of the district.

“The design of Radio Hotel and Tower is inspired by this character – we took the smaller blocks that are typical of the neighborhood and stacked them into a vertical village,” said MVRDV founding partner Winy Maas.

Colored accents can be found in the common rooms

According to the team, the Radio Hotel is the first full-service hotel to be built in Washington Heights.

“Although the neighborhood is the fifth largest in New York City, the Radio Hotel is the first-ever full-service hotel to open in the area,” said Stonehill Taylor.

The guest rooms have a restrained interior

Visitors to the building have access to a ground-floor courtyard that includes a small park, benches, and cafe tables.

A new Dominican restaurant, Jalao, occupies part of the ground floor and is open to both hotel guests and the general public.

The roof offers views of the surrounding neighborhood

A rooftop bar and observation deck offer views of the surrounding neighborhood and the nearby George Washington Bridge.

“The roof offers an expansive, 360-degree view of Lower Manhattan and Queens while providing a landmark at the George Washington Bridge’s connection to the Bronx,” the team said.

Marble Arch Mound to be repurposed in redevelopment of London property

The hotel’s guest rooms feature restrained interiors in the sleeping areas. Bathrooms, however, have light-colored walls and tiling that nod to the building’s colorful facade.

Similar pops of color can be found throughout the common spaces, including the lobby, corridors, and restrooms.

The hotel is MVRDV’s first project in the United States

Other upcoming projects for the company include contributing to the development of San Francisco’s Mission Rock district and an office building in Detroit dubbed the “Glass Mural,” whose facade is painted with vivid, cartoon-like graphics.

The Dutch company was founded in 1993 by Winy Maas, Nathalie de Vries and Jacob van Rijs.

The photograph is by Ossip van Duivenbode.

Project credits:

Stonehill Taylor design team: Paul Taylor (Managing Director), Steve Oakley (Director), Patrick Hebert (Architect), Victoria Janok-Scarpaci (Architect)
MVRDV design team: Fedor Bron, Mick van Gemert, Mark van den Ouden, Samuel Delgado, Ronald Kam, Fouad Addou, Daniele Zonta, Yassin Matni, Giuseppe Carosini and Giuseppe Campo Antico
landscape architect: Johanna Pertz
Interior design: APD Workshop, Simple Architecture
Client: Youngwoo & Partners

The post MVRDV’s vibrant Manhattan high-rise is studio’s first accomplished within the US appeared first on DAILY SAN FRANCISCO BAY NEWS.

This post is sponsored and contributed by Thumbtack, a Patch Brand Partner.

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The post Want A Restore? Here is How A lot A Handyman Prices In The Manhattan Seashore Space appeared first on DAILY SAN FRANCISCO BAY NEWS.

The Radio Tower and Hotel, Dutch architecture studio MVRDV’s first completed US design, has opened in Manhattan, featuring colourful, irregularly stacked volumes.

It was designed collaboratively by Dutch firm MVRDV and local firm Stonehill Taylor, which acted as the architect of record. The 23-storey tower was completed this year and opened in September, four years after the project kicked off in 2018.

The Radio Tower and Hotel features stacked, colorful boxes

Located in the Upper Manhattan’s Washington Heights neighborhood, the building’s primary occupant is a hotel with 221 rooms. The tower also contains a restaurant, shopping spaces and for-rent office space.

The building’s various volumes were sized to each have the same scale as the surrounding neighborhood buildings.

The building includes various rectilinear volumes

Each was also clad in a different brick colour, ranging from yellow, blue, orange and green. According to the architecture studios, this prevents the tall building from “overwhelming” the adjacent streets.

“The property is designed to stand out and serve as a welcoming beacon for out-of-towners coming into Manhattan,” said Stonehill Taylor.

It is the first full-service hotel in Washington Heights, Manhattan

According to MVRDV, the multi-colored bricks in green, yellow, blue, orange and magenta also represent the “diverse and vibrant” character of the neighborhood.

“The design of Radio Hotel and Tower is inspired by that character – we took the smaller blocks that are typical in the neighborhood and stacked them into a vertical village,” said MVRDV founding partner Winy Maas.

Colorful accents are found in the communal spaces

According to the team, the Radio Hotel is the first full-service hotel to be built in Washington Heights.

“Even though the neighborhood is the fifth largest in New York City, Radio Hotel is the first-ever full-service hotel to open in the area,” said Stonehill Taylor.

Guest rooms feature pared-back interiors

Visitors to the building have access to a ground-floor courtyard that includes a small park, benches and cafe tables.

A new Dominican restaurant, Jalao, occupies part of the ground floor and is open both to hotel guests and the public.

The rooftop features views of the surrounding neighborhood

On the rooftop, a bar and observation deck offer views of the surrounding neighborhood and the nearby George Washington Bridge.

“The rooftop offers sweeping, 360-degree views of lower Manhattan and Queens while providing a landmark gateway at the George Washington Bridge connection to the Bronx,” said the team.

Marble Arch Mound set to be repurposed in redevelopment of London estate

The hotel’s guest rooms feature pared-back interiors in the sleeping areas. The bathrooms, however, have bright walls and tiles that nod to the building’s colorful facade.

Similar colorful accents are found throughout the communal spaces, including the lobby, corridors and restrooms.

The hotel is MVRDV’s first project in the USA

Other upcoming projects by the firm include a contribution to the Mission Rock neighborhood development in San Francisco and an office building in Detroit dubbed “Glass Mural” with a facade painted with vivid, cartoonish graphics.

The Dutch firm was founded in 1993 by Winy Maas, Nathalie de Vries, and Jacob van Rijs.

The photography is by Ossip van Duivenbode.

Project credits:

Stonehill Taylor design team: Paul Taylor (managing principal), Steve Oakley (principal), Patrick Hebert (architect), Victoria Janok-Scarpaci (architect)
MVRDV design team: Fedor Bron, Mick van Gemert, Mark van den Ouden, Samuel Delgado, Ronald Kam, Fouad Addou, Daniele Zonta, Yassin Matni, Giuseppe Carosini and Giuseppe Campo Antico
Landscape architect: Joanna Pertz
Interior design: Workshop APD, Simples Arquitectura
client: Youngwoo & Associates

The post MVRDV’s vibrant Manhattan high-rise is studio’s first accomplished within the US appeared first on DAILY SAN FRANCISCO BAY NEWS.

MANHATTAN BEACH, CA — The Manhattan Beach Chamber of Commerce hosted its first ribbon cutting of 2022 Wednesday with Ace Handyman Services South Bay.

This family-owned business opened its Manhattan Beach location in January 2022. The company provides handyman services in the South Bay, including the communities of Manhattan Beach, Marina Del Rey, Redondo Beach, El Segundo, Palos Verdes and more.

“We are excited to be part of the Manhattan Beach small business community, providing both quality workmanship and superior customer service to the residents of Manhattan Beach,” said Scott Weller, Owner of Ace Handyman Services South Bay.

The event marked the first in-person event in 2022, as many public events were on pause during the pandemic.

“There was a noticeable excitement in the air as we gathered to celebrate in-person, once again,” said David Archer, President/CEO of the Manhattan Beach Chamber of Commerce. “The businesses are looking forward to connecting with its community now that the mask mandate has relaxed.”

The post Ace Handyman Companies South Bay Opens In Manhattan Seaside appeared first on DAILY SAN FRANCISCO BAY NEWS.

Companies are trying to bring employees back into the office. Early data suggests that workers still aren’t that keen.

According to a new report by Placer.ai, visits to office buildings have yet to catch up to pre-pandemic levels in such major employment centers as San Francisco, Manhattan and Chicago.

In May 2022, visits to office buildings in San Francisco were down by 67.8% as compared to three years ago, before the pandemic shuttered most of the country. Office foot traffic in New York is down 40.6% over the same period, and 45.7% in Chicago.

Placer.ai’s Office Building Index takes into account foot traffic from nearly 200 office buildings in San Francisco, Manhattan and Chicago.

The tourists are back in New York City, but employees are still holding out even as many of their bosses seek to pull them back to the office.

Spencer Platt/Getty Images

‘They are not coming back’

After two years of working from home, many have adapted and adopted the work from home lifestyle, which has been particularly attractive given how high fuel costs have gotten. Not to mention the fact that COVID-19 is still out there.

Company chiefs are aware of the resistance.

“I have been unsuccessful, despite everything I’ve tried to do to get our people back to work,” Howard Schultz, CEO of Starbucks SBUX, +0.03%,
said during a New York Times event earlier this month.

“I want them back. I plead with them, I said I’d get on my knees, I’d do push-ups. Whatever you want. Come back,” Schultz said. “No — they are not coming back at the level I want them to… I realize that I’m an old-school person, and this is a different generation and I’ve been schooled by our people… We have to establish a new way of working. And I’ve embraced it.”

But early data also seem to indicate that some Americans haven’t yet fully adopted a permanent work from home lifestyle.

Last week, office occupancy hit the highest point since the coronavirus pandemic began in 2020, reaching 44.1%, according to Kastle Systems, which tracks key card swipe data.

Some 64% said they would consider looking for a new job if they were required to return to the office full time, according to a recent survey by ADP, a provider of human resources management software and services.

Of course, it’s a privilege for people to work from home, while so many other service workers have been showing up in person during the pandemic.

The Labor Department says only 7.4% of employees teleworked in May, down from 7.7% the month before. The Federal Reserve Board’s survey looking into Americans’ economic well-being released last month estimated a higher percentage of employees (22%) worked entirely from home.

Write to: aarthi@marketwatch.com

So read: ‘I’m very outspoken about my desire to never work in an office again’: CEOs and employees are locked in a battle of wills over returning to the office

The post Workplace employees in San Francisco, Manhattan and Chicago are usually not returning to the workplace in important numbers, analysis reveals appeared first on DAILY SAN FRANCISCO BAY NEWS.

kali9 / iStock.com

While rents declined in the early days of the COVID-19 pandemic, they have spiked by an unprecedented 17.1% nationally over the last year, according to Apartment List. At the same time, the only generation to record an increase in renting activity in the past year (up by 21%, per RentCafe) is Gen Z — a generation which is playing a big role in a seeming urban revival.

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More: The Minimum Salary You Need To Be Happy in Every State

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Rent growth continued to increase in March, with Apartment List’s national index up by 0.8%. So far this year, rents are growing more slowly than they did in 2021 — however, rental prices continue to rise at a faster pace than pre-pandemic. In addition, over the first three months of 2022, rents have increased by a total of 1.8%. In March, rents increased in 93 of the nation’s 100 largest cities, with “Sun Belt markets in Florida and Arizona continuing to see some of the nation’s fastest growth,” per Apartment List.

The Miami metro has seen the nation’s fastest rent increase over the past six months, up 8%, and also ranks No. 1 for year-over-year rent growth, producing a 30% increase. Over the past six months New Orleans rents went up 8%, Orlando rents rose 6%, Tucson rents increased by 5% and Salt Lake City rents hiked by 5%.

In terms of supply, Apartment List notes there is a gradual easing of the tight market conditions that have characterized the rental market over the past year.

In the midst of these rising prices, one generation seems to be less affected than others. A RentCafe report finds that Gen Z represents more than a quarter of lease applications nationwide, mostly centered in large urban hubs that promise job opportunities. Gen Z residents may bring new life into cities once considered in decline due to the pandemic.

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In 2021, Gen Z rental hotspots included San Francisco, which saw a 101% increase in new apartment renters of this generation, per RentCafe.

See: Gen Z & Millennials Would Rather Be Unemployed Than Unhappy at Work
Find: How Much Money Gen Z Makes in Every State

San Francisco’s popularity was echoed by Jersey City, New Jersey (with a 95% Gen Z increase over the past year), and Manhattan, New York, at a 65% increase. Rounding out the top 10 cities attracting Gen Z renters are Philadelphia, Boston, Arlington, San Jose, Seattle, and Minneapolis.

More From GOBankingRates

About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

The post Regardless of Rents Spiking, Gen Z Shifting to Main City Areas Like San Francisco, Manhattan appeared first on DAILY SAN FRANCISCO BAY NEWS.

Gerenme / Getty Images / iStockphoto

Despite the global pandemic, real estate markets in the US boomed last year. There were no peaks in value or demand on the rental markets as there were on the housing market; in fact, some large metropolitan areas recorded a falling rental value trend. However, according to data from the Zumper rental platform, rental costs are accelerating faster due to growth in the larger cities.

See: Do you dream of renting a luxury apartment? You can afford it in these 20 cities
Find: These are the 50 best cities to rent

While New York City, San Francisco, Oakland, Los Angeles, and San Jose saw the biggest year-over-year drops in one-bedroom rental rates, they are also the most expensive one-bedroom markets by rental prices from the housing guide, according to data.

Apartment Guide collected data on how rental rates are changing in major US cities. The company’s data showed that one-bedroom one-bedroom rental prices in New York City fell 15.2% year-over-year, while the two-bedroom price rose 15.3%. Los Angeles saw an 18.4% decrease in one- and two-bedroom units year over year, while Chicago saw a 12.7% decrease.

Of the eight most expensive cities, rents have dropped 16.3% in May since the pandemic began, compared with January when rents fell 20.1%, according to Zumper.

The pandemic caused one of the largest urban migration. Expensive coastal markets saw rental rates decline as people left on lockdown orders, while the population boom in smaller cities like Orlando and Detroit drove local rental rates higher, reports Zumper. Now the tenants are returning to the big cities.

See how much it takes to live comfortably in 50 major US cities
Find: 10 US cities with lots of jobs and cheap housing

Zumper pointed out that rents in San Francisco have increased significantly since the pandemic began, with the median rent for a one-bedroom room increasing 1.9% between April and May. In San Jose, rental rates for one bedroom one bedroom have increased 6.3%.

The story goes on

“The acceleration in rental growth at the national level is because the expensive coastal markets are starting to recover, while rents in cheaper cities remain unchanged,” reports Zumper. “Now may be the best time to rent if you want to take advantage of prices while they are still low.”

More from GOBankingRates

This article originally appeared on GOBankingRates.com: Moving to Town? Now is the time to rent an apartment in Manhattan or Chicago

The post Shifting to the Metropolis? Now Is the Time to Hire an Condo in Manhattan or Chicago appeared first on DAILY SAN FRANCISCO BAY NEWS.

Gerenme / Getty Images / iStockphoto

Despite the global pandemic, real estate markets in the US boomed last year. There were no peaks in value or demand on the rental markets as there were on the housing market; in fact, some large metropolitan areas recorded a falling rental value trend. However, according to data from the Zumper rental platform, rental costs are accelerating faster due to growth in the larger cities.

See: Do you dream of renting a luxury apartment? You can afford it in these 20 cities
Find: These are the 50 best cities to rent

While New York City, San Francisco, Oakland, Los Angeles, and San Jose saw the biggest year-over-year drops in one-bedroom rental rates, they are also the most expensive one-bedroom markets by rental prices from the housing guide, according to data.

Apartment Guide collected data on how rental rates are changing in major US cities. The company’s data showed that one-bedroom one-bedroom rental prices in New York City fell 15.2% year-over-year, while the two-bedroom price rose 15.3%. Los Angeles saw an 18.4% decrease in one- and two-bedroom units year over year, while Chicago saw a 12.7% decrease.

Of the eight most expensive cities, rents have dropped 16.3% in May since the pandemic began, compared with January when rents fell 20.1%, according to Zumper.

The pandemic caused one of the largest urban migration. Expensive coastal markets saw rental rates decline as people left on lockdown orders, while the population boom in smaller cities like Orlando and Detroit drove local rental rates higher, reports Zumper. Now the tenants are returning to the big cities.

See how much it takes to live comfortably in 50 major US cities
Find: 10 US cities with lots of jobs and cheap housing

Zumper pointed out that rents in San Francisco have increased significantly since the pandemic began, with the median rent for a one-bedroom room increasing 1.9% between April and May. In San Jose, rental rates for one bedroom one bedroom have increased 6.3%.

“The acceleration in rental growth at the national level is because the expensive coastal markets are starting to recover, while rents in cheaper cities remain unchanged,” reports Zumper. “Now may be the best time to rent if you want to take advantage of prices while they are still low.”

More from GOBankingRates

About the author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but now lives in Ohio, where she attended Ohio State University and lives with her two young children and her fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

The post Transferring to the Metropolis? Now Is the Time to Lease an Condo in Manhattan or Chicago appeared first on DAILY SAN FRANCISCO BAY NEWS.

The distortions caused by the shift to work from everywhere hit households that can least afford it.

By Wolf Richter for WOLF STREET.

For months we have seen the data how the big shifts due to the pandemic have affected property markets across the country. In terms of rents, tenants have left large, expensive places like San Francisco, Silicon Valley, Boston, or Manhattan, leaving high vacancy rates, falling rents, and a massive churn in stayers seeking this free upgrade to a nicer apartment as the landlords try to keep their units filled.

And we saw in the data that this outflow, conversely, has resulted in large inflows in destinations, usually less expensive markets, and driven up rents in those markets.

This shift has a troubling component, however. Rents are falling in places with some of the highest household incomes and they are rising in places with much lower household incomes, shifting the affordability crisis from housing to people who can least afford it – in a matter of months.

The following table lists the 16 districts (of the 100 largest districts) whose rents fell between 10% and 24% year-on-year in February. It also shows the median 1-BR asking rent and median household income, based on a new study by Zumper of the affordability issues that caused the shifts.

To point out that nothing is universal, there’s also one county on the list with a sharp year-over-year rent decline and one of the lowest rents and household incomes in the U.S. ($ 41,800): Hidalgo County, Texas.

When it comes to median household income, San Francisco ($ 124,000) and Silicon Valley Counties of Santa Clara ($ 133,000) and San Mateo ($ 138,000) top the list, and they also top the list for rental declines . For these lagged folks, renting has become, so to speak, a lot less unaffordable. (If your smartphone cuts off the sixth column on the right, hold your device in landscape orientation).

And most of the 16 boroughs that recorded rental income between + 10% and + 22% year-on-year have a relatively modest median household income compared to the wealthiest boroughs. The 22% increase in rents is particularly impressive in Detroit and Indianapolis, where median household incomes are on the lower end of the spectrum, and this will hurt.

There is another element here. Some of the counties on this list are geographically located near very expensive, high-household income housing markets, such as Counties of Kern and San Bernardino in the urban areas of Los Angeles and San Diego. or Sacramento and Fresno counties to the San Francisco Bay Area, indicating that people are moving to cheaper cities just a few hours’ drive from their former location.

Given the large population like New York City, Los Angeles, or the Bay Area, they can easily skew rents in smaller, less expensive markets. And as rents go down in expensive cities and go up in cheaper cities, the difference between the two collapses where at some point it’s no longer worth moving.

The graph shows the difference between the 50% decrease in 1-BR rents in San Francisco and Sacramento and the 1-BR rents in San Francisco and Fresno, which fell 46%:

What has essentially taken place is a shift in tenants from the wealthiest to the less affluent districts, and once that shift has picked up, rents have increased in the receiving districts.

Some of these people who had moved kept their jobs but moved to work from everywhere. and they brought their high household incomes with them and they are used to the much higher rents in their expensive markets and they offer the rents and still think they are getting a deal.

At the receiving end of these shifts, however, are tenants with relatively modest household incomes who are now competing with an influx of high-income tenants, and they are now facing massive and unaffordable rent increases.

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The post How the “Affordability Disaster” Migrated from Excessive-Revenue Rental Markets, as Manhattan & San Francisco, to Decrease Revenue Markets, as Detroit & Fresno appeared first on DAILY SAN FRANCISCO BAY NEWS.

This is not a slip up.

By Wolf Richter for WOLF STREET.

Houston has been the toughest major office market for landlords for years after a historic boom in office tower construction clashed with the Great American Oil Bust, which began in 2015, and hit a maddened spell in April 2020 that briefly collapsed the reference WTI for crude oil quality minus $ 37 per barrel on the futures market. Hundreds of oil and gas companies filed for bankruptcy in 2020, most of them in Texas. Added to this was the relocation of the pandemic from home.

With the announcement of their plans, it is becoming increasingly clear that there will be a long-term hybrid model in which some employees work from home permanently, others work in the office almost all of the time, and many others work from home all the time and temporarily immersed themselves in the Office open, with hot desking and large lounge meeting areas taking over desk farms. And companies can reduce their office requirements.

And now Houston is getting a lot of hot competition in terms of vacant office space from large, expensive office markets like San Francisco, Los Angeles, Manhattan, Chicago, Washington DC, and others.

Houston, still the toughest office market.

Available office space rose to 54.8 million square feet (msf), or 31.6% of the total, in the first quarter, according to JLL, a real estate and investment management service provider. Available space includes vacant, sublet and occupied office space that is currently being marketed as available for rent. JLL named the causes: “Bankruptcies, downsizing and layoffs.”

The total vacancy rate rose for the fifth quarter in a row and reached 26.2%. Of the 19 sub-markets, 15 recorded rental losses in the quarter (chart via JLL):

“Large blocks of sublet space continue to come out,” said JLL. In the first quarter, the availability of subleases increased to 6.4 msf.

If companies rent office space that they no longer need or no longer need due to downsizing and that have only been rented for possible future use, they can sublet the space on the market. And because they are only trying to cover part of their costs and not have to make money from the subleases, they can do so at much lower rents than direct leases from landlords. And that happens on a massive scale.

Overall, asking rents (red line) are down to $ 31 per square foot (psf) per year, but asking rents for subleases are 26% lower, at $ 22.93 psf. Advertised rents are the specified rents. However, landlords can work with their tenants to come up with a more attractive proposition, including concessions, free rent and improvement grants (graphic via JLL):

The total market-wide leasing volume in the first quarter fell from the five-year average by 66% to 1.3 msf, as “the tenants have continued to postpone the leasing decisions”.

Once one of the hottest office markets, San Francisco is suddenly approaching Houston.

According to real estate service provider Savills, the number of subleases rose by a further SF 200,000 in the first quarter to a new all-time high of SF 8.9 million. Last year, San Francisco’s sublet space lost 6.4 msf in Houston, even though the Houston office market is more than double that of San Francisco.

The overall availability rate rose from the single-digit numbers two years ago to 23.6% (graphic via Savills):

“Current conditions offer users an unprecedented opportunity to secure space in what was once an incredibly tight leasing environment as owners soon have to compete with the tsunami of sublet space,” Savills said in his San Francisco Market Report. A suspected office shortage suddenly turns into a majestic office glut.

Overall, asking rents fell by 13% year-on-year and asking rents for class A fell by 15%. Savills: “In view of the flood of available space on the market, an additional decline is to be expected in the coming quarters, as the landlords move from a phase of the“ closed market ”to a phase of revaluation as soon as the tenants’ appetite for space is complete again begins to grow The sublease market is becoming a real competition. “(Diagram via Savills).

Leasing activities are rented at just 0.4 msf, a decrease of 75% compared to 1.6 msf in the first quarter of 2020 and a decrease of 85% compared to 2.5 msf in the first quarter of 2019. More than half of the leases signed were accounted for on the extension of rental agreements.

The angel.

According to Savills’ Los Angeles Market Report, office availability increased to 23.6% in the first quarter, its highest level since 2009. Sub-lease space increased to 9.0 msf. And the availability of “shade” – space that is available but not currently advertised – will be a bigger problem in 2021, especially in trophy buildings, “the report said (graphic via Savills).

The leasing activity in the first quarter fell year-on-year by 49% to 2.0 msf. However, rental demand “remains stubbornly high” rose to $ 3.85 per square foot per month (or $ 46.20 per year).

“As has been seen in the last few quarters, the currently higher asking rents are misleading, as landlords have to take aggressive action against tenants in view of the weaker market conditions. Concessions such as parking reduction and contraction rights [a right in the lease to reduce the size of the office at a future date] are widespread again and are unlikely to go away anytime soon, ”said Savills.

Manhattan, the biggie.

In the largest office market in the US, availability rose to 17.2%, “the highest level in at least three decades,” said Savills, “with both direct and sublet space continuing to flood the market.” The availability of subleases increased by 3.4 msf to 22 msf in the first quarter. And an additional 7.9 msf of direct storage came on the market, including “some notable additions to some shuttered coworking spaces.” (Diagram via Savills).

Leasing activity in the first quarter fell by 48% year-on-year and by 13.7% compared to the fourth quarter to 4.0 msf.

The average asking rent fell by 9.1% year-on-year to 76.27 psf per year. The asking rents do not include concessions that have “increased significantly” in the case of new long-term class A leases. Additionally, the average tenant improvement allowance increased 15.5% to 124.85 psf and the average free rent increased 17.4% to 13.5 months, according to Savills.

Downtown Chicago.

Overall availability rose to 21.6% and showed “no signs of slowing” according to Savills’ Chicago report. In the central loop, the availability increased to 24.3% (graphic via Savills):

Although leasing activity was stuck in collapse mode in the first quarter, declining 73.5% year-over-year, landlords haven’t moved much in terms of rental demand. “However, many landlords have shown a propensity for sharply reduced rents, increased concessions and considerable flexibility for users who are active and willing to make leasing decisions,” the report said (graphic via Savills).

Washington DC, the government is still leasing.

Amid growing sublet space, total availability rose to 20.4%, “the highest level in at least three decades,” as “tenants are waiting to rent space, rent less space or bring space back onto the market,” according to the report by Savills in Washington DC.

Total leasing activity declined 33% year over year to 1.2 msf. Almost half of these activities came from federal and local authorities.

Overall, the asking rent fell to 55.53 psf per year. “However, owners are aggressive about pricing, concessions and flexibility to attract and retain tenants,” the report said. “New Class A long term leases receive an average of $ 148.00 psf tenant improvement grants and 21 months of free rent. This corresponds to a total of 260.00 psf – an increase of a little more than 50.00 psf since the beginning of the pandemic – and significantly reduces the effective rent of the tenants. ”(Diagram via Savills).

As Houston has shown, the office markets can be in very difficult slumps for years as developers continue to build the newest and largest office towers. In Houston, despite years of burglary, there is still more than 3 msf of office space under construction, although this is 28% less than the 10-year average, according to JLL.

And when that sort of long slump occurs, there’s an escape to quality with businesses moving to the newest and tallest towers when their old lease expires and giving up older office buildings whose landlords eventually pull themselves off the mortgage and the lenders could let you worry about the collateral.

The question is not what to do with the latest and greatest office towers because they will always find tenants. The question is what to do with older office buildings whose tenants move out as part of the flight to quality, if the lease allows it. It is these older office towers – or rather their creditors – that will be in trouble if the break-in drags on.

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