Economic Research & Analysis

November 2015 Economic Snapshot

Inside this Volume

Private employment in New York City increased 11,200 between September and October 2015.
The unemployment rate fell to 4.8% between September and October 2015.
The Manhattan Class A office vacancy rate was 8.6% in October 2015, while the average asking rent was $78 PSF.
Hotel occupancy was 92.5% in September 2015, up slightly from 92.2% in September 2014.
Passengers in New York City area airports totaled 12.2 million in August 2015, up 5.2% from August 2014.


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#67 New York City Commercial Office Forecast 2025

This month's podcast looks at New York City's commercial office forecast over the next 10 years.


  • Private sector jobs in New York City rose by 11,200 in October 2015 after a loss of 9,500 jobs in September 2015.
  • Government jobs in the city fell slightly, resulting in a net overall increase of 11,100 jobs between September and October 2015. Health Care & Social Assistance had the largest month-to-month growth, adding 6,200 jobs.
  • Since October 2014, private sector employment has risen by 94,000 jobs or 2.6%. This compares to the national growth rate of 2.2%.
  • New York City’s unemployment rate was 4.8% in October 2015, down from 5.2% one month prior.

New York City Commercial Office Forecast 2025

  • New York City’s flourishing tech, creative, and innovation industries are not only driving employment growth but are also transforming the commercial real estate market. Firms in these sectors are looking for flexible, creative, wired space—and they are increasingly looking to boroughs outside of Manhattan to find it. Based on projected job growth, the city will need up to 60 million additional square feet of office space over the next 10 years to meet demand.1
  • In Q3 2015, commercial offices in Midtown South and Brooklyn had the lowest overall direct vacancy rates among all central business districts in the U.S. (4.7% and 5.7%, respectively). Vacancies in Midtown and Downtown Manhattan were also among the lowest in the nation (4th and 9th, respectively).2  Direct vacancy rates in Brooklyn, Midtown, and Midtown South last quarter fell below what the NYC Independent Budget Office defines as the natural office vacancy rate of 8%, or “the point at which supply and demand are balanced and lease rates are stable,” indicating that demand exceeds supply.3
  • Queens has the lowest office vacancy rate among the five boroughs (4.1%). Vacancy rates in Brooklyn and Manhattan have trended together over the last decade, averaging 7.8% and 7.2%, respectively, in 2015 so far. Brooklyn has experienced the greatest increase in direct rental rates since 2005 (+60%), followed by Queens (+42%) and Manhattan (+40%) (see Figure I).

Figure I. Office Rental Rates and Vacancies, 2005-2015 (YTD)

  • Boroughs outside Manhattan account for less than 15% of the city’s total commercial office space and roughly 11% of space currently under construction in 2015 (see Figure II). The distributions in Figure III, however, show that the geospatial distribution of new commercial space can vary significantly by year. Boroughs outside of Manhattan are currently home to nearly two thirds of the commercial office space that has come online this year, up from just 5% in 2013.

Figure II. Commercial Office Real Estate by Borough, 2015 (YTD)

Figure III. Commercial Office Deliveries by Borough, 2010-2015 (YTD)

  • 60 million additional SF of office space by 2025 would constitute the largest and most rapid increase in commercial office space in NYC in nearly two generations.4  But a significant share of construction is already planned or underway. Planned new space at Hudson Yards and the World Trade Center, together with new and proposed construction in East Midtown, put NYC a third of the way toward creating this capacity. Most of the growth, however, is expected to come from  emerging business districts outside of Manhattan, notably in Jamaica, Queens, Lower Concourse in the Bronx, and Staten Island’s North Shore, as well as in more established districts such as Downtown Brooklyn and Western Queens. Nascent commercial corridors could account for 40% of new commercial growth over the next decade.

1 Since office-using occupations exist throughout all industries, and given that the distribution of these industries has remained constant over time, we used the ratio of total office SF to total employment to estimate the amount of office space that’s needed to accommodate the number of new jobs that the city expects to add over the next 10 years. After first taking into account decreasing needs for storage space and trends toward more open floor plans, telecommuting, and shared workspaces, we estimate that new office workers will require an additional 50-60 million SF of commercial space by 2025.
2 Cushman & Wakefield.

Real Estate and Construction

Real Estate

  • In October 2015, the Manhattan Class A direct vacancy rate increased to 8.6% from 8.3% one month prior, while the average rental rate increased slightly to $78 PSF. 
  • The direct vacancy rate in Midtown increased by half a percentage point, prompting a slight drop in asking rents. The Downtown direct vacancy rate fell to 11.5% from 11.8% between September and October 2015, with direct rents rising by more than $2.50 PSF. 
  • Though the Downtown sublease vacancy rate was up slightly over the period (0.8% in October versus 0.6% in September), the associated rental rate rose by more than $4.00 PSF.


For the twelve months ending September 2015:

  • The number of building projects (including new, additions, and alterations) that started construction in New York City was down 1.2% relative to the twelve month period ending September 2014. Planned space for such projects, however, was 87.3% higher than the same period in 2014, suggesting that building projects have become larger. The value associated with these projects was also up 77.2% over the period.
  • 3,430 residential building projects began construction, a 3.2% increase from the twelve months ending in September 2014. These starts contained 47,530 units, almost double the number from last year.

Transit, Travel, and Tourism

Transit Ridership

  • Total ridership on MTA subways, trains, and buses in September 2015 was 226.7 million, a decrease of 3.05% from September 2014.
  • Subway ridership in September 2015 was 146.5 million, down 1.91% from September 2014.

Source: Metropolitan Transportation Authority

Air Traffic

  • In August 2015, 12.2 million passengers flew into and out of the region's airports, an increase of 5.2% from August 2014.
  • Domestic air carriers accounted for 7.5 million passengers, a 5.2% increase from August 2014. 
  • 4.7 million passengers traveled with international air carriers in August 2015, a 5.2% increase from August 2014.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

  • Total Broadway attendance was approximately 1,213,260 during the five weeks ending November 1, 2015, down 3.0% from the same period last year.
  • Broadway revenues during this period were about $122.7 million, down by 2.4% from last year.

Note: Gross revenue and attendance figures include all shows playing on Broadway during the specified period.
Source: The Broadway League

Hotel Occupancy

  • In September 2015, the average daily hotel room rate was $372, a 1.7% increase from September 2014. 
  • Hotel occupancy was 92.5% in September 2015, up from 92.2% in September 2014. 
  • The average occupancy rate decreased the most in hotels charging over $500 per night, decreasing by 3.0% from September of last year.