NEW YORK, Oct. 14, 2021 /PRNewswire/ — Real estate investment firm KPG Funds (KPG) announced today their 3rd Quarter RSSI Index Results. KPG predicts an imminent surge of office leasing activity in NYC.
During the 3rd quarter, every Manhattan submarket had more tenant demand than the 1st quarter. Most of the new tenant demand was in Midtown South to the tune 6.5 million square feet, up a staggering 64 percent from the first quarter of this year, according to the analysis.
«Office demand figures serve as an indicator of future leasing activity», said Greg Kraut, CEO of KPG Funds
Midtown South actual leasing activity totaled 1.7 million square feet this quarter. This marked the first time that velocity eclipsed 1.0 million square feet in consecutive quarters since 4Q19 and 1Q20. In the 3rd Quarter 2021 leasing activity spiked to 1.8m sf the highest quarterly total in over 2 years.
In addition, there are over 1 million square feet this quarter of new tenants that now want to be in SOHO/NOHO and Meatpacking/Hudson Square. «These micro submarkets continue to massively outperform other submarkets and are on pace to have more demand than supply in the next couple of quarters» Greg Kraut KPG Funds
Tenants are now using office space as a lure to recruit and retain talent. Vibrant work live play locations appeal to high growth, emerging companies seeking to draw on NYC’s deep and skilled talent pool. Highly amenitized and designer office product is now king which is a contrast to the surplus of commodity product that remains on the market.
On the other hand, demand for office space declined in Downtown East as well as in Midtown neighborhoods including Murray Hill, Park Avenue, and the Plaza District. In Murray Hill, for example, prospective tenants collectively looked for 230,000 square feet of office space in the third quarter, down 29 percent from the first quarter.
«Demand for high-end quality space in cool areas has seen a vast increase in velocity. Fortunately, KPG Funds foresaw this and has acquired properties in Midtown South and prebuilt their spaces to a new top of the market standard» David E. Malawer.
KPG Funds («KPG») is a fully integrated real estate private equity platform with Asset Management, Project Management, Development, Design, Leasing and Property Management. With over 35 years combined experience based in NYC, KPG manages fully discretionary institutional vehicles targeting middle market value-add office investments. KPG is a privately held and management-owned investment firm filed with the SEC as an exempt reporting adviser, and that maintains an unwavering commitment to put its investors needs first. Additional information about KPG and a selection of current holdings and previous transactions are available at or by calling 212-359-0743
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SOURCE KPG Funds