Manhattan is in the midst of its biggest office development surge since the 1980s. Between 15 and 25 million sq ft of new office development is set to be added in the coming years. Hudson Yards, the biggest private real estate project currently under construction in the US, together with surrounding projects, will alone add roughly 10 million sq ft to Manhattan’s skyline.
As the urban environment becomes the unit of value rather than purely an area of office space available, a retail setting that appeals to both office tenants and residents is increasingly seen as essential for drawing both audiences to property. Hudson Yards will dramatically expand the residential and commercial base of the Far Westside, adding several thousand more residential units to those that have already been built in the past few years. Luxury retail, along with entertainment venues such as the ‘Culture Shed’, will provide added attractions.
Lower Manhattan, or LoMa, once the domain of daytime office workers, is now considered a desirable place in which to live and work – the residential population of the area has doubled in just a decade. More business occupiers have also been drawn to the area, not just because of lower rents and tax incentives, but also because of a vastly improved retail and hospitality offering.
While the financial sector has scaled back its floorspace requirements, the tech industry has come to the forefront of occupier demand. Tech firms are paying top dollar for space that may be lacking in modern amenities purely to be in the ‘right location’ (see fig. 13). In New York, this means Union Square, Williamsburg, Bushwick and Dumbo. Recognising that the appetite for space has become more geographically flexible, developers are scrambling to meet demand. In Brooklyn, for example, Industry City will turn a late 19th-century manufacturing facility into 6 million sq ft of space for the innovation economy.