A few months ago I prepared a report on the Manhattan East Side Submarket. Before the information gets outdated, I thought I would share it. So, without further ado . . .
- East River – Lexington Ave.
What's interesting, however, is the gap between Midtown rents on the whole and East Side rents that has been growing since the year 2000. There is now a $10 difference! What is really telling, however, is this next chart, which tracks Midtown Class A & B rents and East Side Class A & B rents.
As you can see above, there is basically no gap between Class B rents on the whole in Midtown and East Side Class B rents. However, the gap between Class A rents in Midtown and Class A rents on the East side is huge - $25!
I have some theories for which can account for some of the discrepancy (new class A inventory on the West Side, impact of the Plaza district, etc.). However, I do not believe that there is a good justification for this incredibly large discrepancy. Sure, the East Side does not have the best transportation in the world, but virtually all of the East Side's Class A buildings are on the West border. The point is, that if you are looking for Class A space in Midtown, there is rent arbitrage opportunity between the East Side and the rest of Midtown, and you should take advantage of it!