As New York City’s technology industry has bloomed, so has SoHo as a commercial real estate destination. Bound by Houston Street to the north, Canal Street to the south, and Lafayette Street and Sixth Avenue to the east and west, respectively, the SoHo (“south of Houston Street”) submarket has – perhaps not surprisingly – become one of Manhattan’s hottest office locations. Home to the world’s largest collection of 19th-century-era cast-iron buildings – over 250, in fact – SoHo’s central location and easy access to the rest of Manhattan and beyond makes it attractive even for workers who must commute through Penn Station or Grand Central Station. Cast iron was initially used as a decorative front over a pre-existing building. With the addition of modern, decorative facades, older industrial buildings were able to attract new commercial clients. SoHo’s remake continues to this day.
But SoHo’s attraction for commercial tenants looking for space to call home also derives from its success as a residential neighborhood. Converted pre-war industrial warehouses and new luxury condominiums have all created an influx of young professionals who want to work and live in the same place. In that regard, few Manhattan submarkets are as accommodating as SoHo. Many of those industrial buildings were home to New York City’s textile industry, which left Manhattan in the years following World War II. Many SoHo buildings were unoccupied during this time, giving the area the nickname of Hell’s Hundred Acres until gentrification slowly started in the 1960s.
Overall current office inventory in the SoHo submarket is approximately 4 million square feet. But as of the first quarter 2012, the vacancy rate was just 1.9 percent – demonstrating just how popular the submarket remains. Still, office space in SoHo remains a good value, with average asking rents generally at approximately $47 per square foot.