MARKET ANALYSIS REPORT OF
OFFICE SECTOR IN MIDTOWN MANHATTAN
Prepared by: Mengfan Wu
Course: Real Estate Economics and Market Analysis
Date: 12/12/2014
TABLE OF CONTENTS
Project statement and definition
This report is to investigate whether demand is sufficient to absorb growth in the office space of Midtown Manhattan. In the past decade, the midtown Manhattan became increasingly popular to a variety of companies after the revitalization of the Broadway and the 911. While Lower Manhattan has been the leading financial center for the past few decades, Midtown is the country's largest commercial, entertainment and media center. Midtown Manhattan is now a growing center of finance, and is increasingly vibrant. As shown in the picture…show more content… As the third largest central business district in New York City, Downtown Brooklyn received over $9 billion private investment and $300 million public improvements after the rezoning in 20043. Now there are several major office building constructions underway. According to Current Employment Survey data from the U.S. Bureau of Labor Statistics, total non-farm payroll employment for the Newark-Union, NJ-PA Metropolitan Division and the Bergen-Hudson-Passaic, NJ Metropolitan Division combined increased by 35,200 (1.9%) from July 2013 to July 2014, an acceleration compared with past year-over-year gains. This included an increase of 30,700 (1.9%) for the private sector4. Compared with Midtown Manhattan, Jersey City gains an edge by an educated workforce, transportation connectivity, and, of course, lower costs. By 2014, the average asking rent for Class A office building in Downtown Jersey City is less than 44 dollars per square foot. Whilst in Midtown Manhattan, the rent is 76.51 dollars per square foot. As for lower Manhattan, it is the third largest business district in the United States, after Midtown Manhattan and the Chicago Loop. Home to New York Stock Exchange, NASDAQ and many corporate headquarters, downtown Manhattan continue to be a brand name that appeals to…show more content… Coincident economic indicators are one of three groups of economic measures used to track business-cycle activity. The four coincident economic indicators that indicate the actual incidence of business-cycle peaks and troughs are: (1) the number of employees on nonagricultural payrolls, (2) industrial production, (3) real personal income (after subtracting transfer payments), and (4) real manufacturing and trade sales. Each of these four individual indicators is useful in its own right, but when combined as a composite measure, even greater insight into the business-cycle activity is achieved. The data is obtained from Federal Reserve Bank of New York.
Another independent variable is the growth rate of the office employment in New York metropolitan area. The data source is the Bureau of Economic Analysis. Since we would like to see how the office employment trends in FIRE and service sector would affect demand, I only added these parts together.
To better gauge the economy would impact office space demand, Dow Jones Industrial Average index is introduced into the model to track the change in U.S. capital market, global affairs and any events that would potentially lead to economic
