Tall & Urban News

According to the reporting from Business Insider, the demand for high-end office space continues to thrive, even as the broader office market struggles with high vacancy rates and a sharp decline in new construction. Projects like RXR Realty's 175 Park Avenue in New York City and Related Companies' next phase of Hudson Yards are moving forward with confidence, despite limited pre-leasing.  The proposed 83-story 175 Park Avenue, designed by Skidmore, Owings, & Merrill, aims to begin construction midway through 2025. The developers have stated that there has been growing tenant interest, and they are confident in moving forward even with less pre-leasing than they had originally planned for.  The project, a recipient of a CTBUH 2024 Future Project Award of Excellence, will be built next to Grand Central Terminal in midtown Manhattan.  

Prime office space, characterized by cutting-edge amenities and sustainability features, remains in high demand among major corporate tenants, driving developers to explore alternative financing methods as traditional lending tightens. This surge in interest reflects a growing recognition of the long-term value in building and securing top-tier office environments for the post-pandemic future.

CBRE data shows that while only 30 million square feet (2.8 million square meters) of office space will be delivered in 2024—half of the pre-pandemic levels—developers are focusing on prime office properties to meet future demand. Deliveries are expected to drop further to just 14 million square feet (1.3 million square meters) by 2025, but high-end spaces are projected to see a recovery by 2027, reaching pre-pandemic vacancy levels.

Learn more about this story at Business Insider.