Commercial loft property market in New York City

Commercial loft – Everybody has seen movies or TV Series, where the main character is inhabiting a big apartment with high ceilings with red brick walls and a dedicated elevator to reach the apartment. The main character is looking from the windows where he sees an industrial area and skyscrapers in the background. Such properties are defined as lofts and it is true that artists made them famous and wanted. The economic downturn in the 1960s left many industrial spaces (factories, warehouses, slaughterhouses) abandoned and derelict.

As they were concentrated on certain areas of New York, whole neighbourhoods became ghost cities where no one was working or living. It was at that time, when artists found inspiration in those abandoned places and made them their studios where art was created. In fact, this conversion is something quintessential for New York on par with the Empire State Building or Central Park.

Commercial loft for lease in New York City

What makes the commercial loft different from other property classes is exactly its former purpose – being an industrial building. High ceilings, big window openings to get as much natural light as possible, wide open spaces, dedicated elevators, brick walls and visible elements of plumbing or heating and ventilation are among the characteristic of a loft. Interestingly enough – such properties are finding new fans among businesses who use them for commercial purpose.

Engineering and tech companies, Startups and art-related businesses (Marketing, PR, Ads) are the likely tenants for such properties, where they find back the inspiration of an old factory design to fuel their innovation and creative processes. Most of the buildings have been updated to current technical standards, but the main visual elements of the infrastructure have remained visible.

Loft space for commercial use can be found in many areas in New York City

Manhattan has its lofts located around SoHo and Tribeca, and some in Flatiron District, the Garment District, Meatpacking District and Chelsea. Given the premium location, you can expect leasing rate to be higher than average. Affordable commercial lofts can be found in the former industrial areas of New York such as Red Hook, Williamsburg and Bushwick in Brooklyn. Queens has its lofts in Long Island City and Astoria. Leasing rates of commercial lofts are typically lower than the rates of classical office space and this makes them also attractive on the market.

Commercial loft office space  in Flatiron District and Chelsea asking price: between $55 and $70 per square feet depending on the floor. Being on a budget – you can have commercial lofts for rent in Brooklyn and Queens with asking rates: around $27 to $40 per SF. 

Commercial loft space for sale in New York City ?

Opportunities for commercial lofts for sale and not a lot, since they are an area of big interest and businesses are competing also with private investors, who are looking for deals for refurbishing lofts in order to increase their market value. Offers are available in wide ranges – starting from $900k all the way up to $50 million for properties in lower Manhattan.

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MANHATTAN OFFICE SPACE MARKET INFORMATION

INVENTORY SF 376 M +1.0% Prior Period 373 M
UNDER CONSTRUCTION SF10.2 M -10.3%Prior Period 11.4 M
VACANCY RATE11.7% +1.0%Prior Period 10.7%
AVERAGE MARKET RENT/SF$76.15 +1.2%Prior Period $75.25
MARKET SALE PRICE/SF$904 +2.9%Prior Period $878
MARKET CAP RATE4.3% Prior Period 4.3%

Availability
Vacant SF 40.7 M Sublet SF 11.8 M
Availability Rate 18.3% Available SF 65.8 M
Available average Asking Rent/SF $60.04
Occupancy Rate 88.3% Percent Leased Rate 91.5%
Office Sales Past Year
Asking Price Per SF $701
Sale to Asking Price Differential -1.4%
Sales Volume $7.5 B
Properties Sold 104
Months to Sale 11.0
For Sale Listings 142
Total For Sale SF 1.3 M

Demand
12 Months Net Absorp % of Inventory -0.1%
12 Months Leased SF 32 M
Months on Market 8.2
Months to Lease 12.1
Months Vacant 11.0
24 Months Lease Renewal Rate 35.1%
Population Growth 5 Years 3.0%