Even in the midst of the pandemic, the contribution of office buildings in New York City to property taxes remains significant at 20.6% of the total, serving as an essential source of government revenue. A recent report released by the New York State Comptroller Thomas DiNapolli’s office analyzed that just the office buildings in 20 postal code areas in New York City accounted for 80% of the overall economic contribution, with the most valuable office buildings located around the emerging Hudson Yards development area.
According to the report, the postal code for Hudson Yards is “10001,” and the market value of office buildings in this area grew by $6 billion from the 2020 fiscal year to the 2025 fiscal year.
The “10001” postal code area covers Midtown Manhattan around 34th Street and Pennsylvania Station. Due to the addition of numerous new office buildings in the area, the overall office building market saw a 55.5% growth from the 2020 fiscal year to the 2025 fiscal year, second only to the “11101” postal code in Long Island City in Queens, where the office building market grew by 65%.
However, the office building market in New York City, particularly in Manhattan, is only experiencing a slow recovery compared to pre-pandemic levels. The report points out that during the period from the 2015 fiscal year to the 2020 fiscal year (early pandemic), the office building market experienced a growth rate exceeding 31%. In contrast, from the 2020 fiscal year to the 2025 fiscal year, the growth rate was only 7%.
The report indicates that traditional office markets like Wall Street and the Financial District have cooled off, even performing lower than areas such as Dumbo, Downtown Brooklyn, and Cobble Hill in the “11201” postal code area of Brooklyn, where the market growth rate is at 19.6%.
The report highlights that aside from the bustling office market around Hudson Yards and in neighborhoods like Chelsea and Koreatown, Manhattan still has several postal code areas with significant market growth rates from the 2020 fiscal year to the 2025 fiscal year, exceeding 10%. These areas include:
(1) 10012, East Village, SoHo, with a growth rate of 27.7%;
(2) 10003, Union Square, Gramercy, East Village, with a growth rate of 18.5%;
(3) 10011, Chelsea, West Village, with a growth rate of 14.1%;
(4) 10013, East Village, Chinatown, with a growth rate of 12.0%;
(5) 10018, Midtown West, Garment District, with a growth rate of 10.9%;
(6) 10010, Flatiron, Gramercy, Kips Bay, with a growth rate of 10.3%.
As for the areas in Manhattan where the office market has significantly cooled down, the prime examples are the “10022” postal code in East Midtown and the Turtle Bay area between East 43rd Street and East 53rd Street, with a 11.9% decrease in office building market value over the past 5 fiscal years.