What You Will Learn in This Video on Flights to Quality:
- Flight to Quality is a trend where tenants in older buildings move to newer, more modern buildings with better amenities and lower carbon footprints. This is because newer buildings are often considered more valuable, even if they are more expensive.
- The most popular office buildings in Manhattan are currently getting rents of $150 to $250 per square foot and are fully leased.
- Flight to Quality is not happening in Westchester County because all of the buildings there were built at the same time. This means that there is no strata of quality to choose from, so tenants are generally not able to move to newer, better buildings.
Video Transcript:
“When people talk about a flight to quality, what does that mean?
It generally is talking about space in New York City and other large cities where there are older buildings and tenants are choosing to leave the older buildings and go to new buildings that have less carbon footprint that are much more highly amenitized, much more modern. Certainly when demand is soft even though these newer buildings will be more expensive they’ll be more valuable to the tenants. So there is a flight to quality and ironically the most popular buildings in Manhattan right now are getting $150 to $250 dollars a square foot and they’re full they’re being pre-released.
But we don’t have flights to quality in Westchester because again you know everything was kind of built at the same time and we don’t have the strata of quality that will allow us to do this.”
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