Northeast

The office market in 2017 has rebounded from the slowdown of 2016 — suggesting that Manhattan market conditions remain stronger than some might have imagined at the end of last year. Growth in office-using employment has picked up steam this year, and New York’s Gross City Product expanded at a faster rate than in 2016. Buoyed by large transactions in the financial services and government sectors, leasing activity also expanded in the first half of 2017, outpacing 2016’s mid-year leasing activity by 19 percent. Asking rents continued their trajectory of modest growth, though tenant improvement allowances have grown at a far faster rate, suggesting tenants are paying lower net effective rent; meanwhile, the number of upward repricings on existing listings fell off considerably in the first half of 2017, while downward repricings continue unabated from last year. Despite the increase in both leasing activity and velocity in the first half of 2017, Manhattan continues to see negative net absorption this year, largely due to the delivery of new office product in Midtown South and Downtown. This has pushed up the availability rate to 12.0 percent — suggesting increasingly tenant-favorable conditions in the market. New York City Employment After a relatively …