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New York City Office, Retail, Industrial Market Overview |
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Downtown New York City Office Space
Downtown rents have risen 10-20% over the last two months for Class B and C Buildings. There are still good deals to be had compared to Midtown but space is renting quickly. Downtown Incentives are still available and combined with lower rents than Midtown a large number of companies are moving Downtown.
Last month, all major office markets experienced a decline in available vacant space, with few new buildings coming to market and a number of large office buildings still being converted to residential. In the midst of this activity, the WTC site has still not been solidified (read below for more).
Midtown and Midtown South New York City Office Space
The rising downtown rents are having an effect on Midtown and Midtown South. Office spaces are renting quickly, and landlords are not afraid to increase the rent to test the market. Landlords are also offering cash contributions instead of a full build-out, which only partially covers installation costs.
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Manhattan Office Space Rentals: |
- Total New York City Office Class A vacancies decreased from 17.20 million RSF to 16.82 million RSF, while total market vacancy decreased from 28.48 million RSF to 27.74 million RSF.
- Total New York City Office direct lease vacancy decreased from 24.17 million RSF to 23.23 million RSF, while total sublease vacancy increased from 4.31 to 4.50 million RSF.
- Total New York City Office Market vacancies decreased for the first time in 3 months as Midtown South Office vacancy dropped from 4.07 to 3.98 million RSF while Midtown Office vacancy dropped from 15.22 million to 14.92 million RSF. Total New York City Downtown Office vacancy rates also decreased from 9.20 million RSF to 8.84 million RSF.
- Total vacant Office Space in Midtown New York City decreased led by a decrease in total direct lease space from 13.13 to 12.64 million RSF. Total vacant sublease space increased from 2.08 to 2.29 million RSF.
- Midtown South Office direct lease vacancy decreased from 3.56 million RSF to 3.43 million RSF, while sublease vacancies rose from 0.51 to 0.55 million RSF.
- Total Downtown New York City Office vacancies decreased with direct lease space decreasing from 7.48 million RSF to 7.17 million RSF and sublease vacancy decreasing from 1.72 to 1.67 million RSF.
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New York City Real Estate Developments: |
- WTC: There are numerous rumors that Larry Silverstein will give up the development rights to the Freedom Tower and Tower 5 on Liberty Street. The Port Authority and the City believes this will speed up development of the site. Larry Silverstein believes that only tower 5 could be converted to residential use from office use. Governor Pataki wants the Freedom Tower built ASAP presumably so it can be used as a centerpiece of his 2008 presidential campaign.
- Chelsea Markets Development: The Jamestown group plans to build a 300,000 SF tower on top of the Chelsea markets, the full block on 15th and 16th streets, and 9th and 10th Avenues.
- 1095 Sixth Avenue, the former Verizon Headquarters is being renovated for $260 million, and will be completed some time in 2008.
- A development site at 400 Fifth Avenue is for sale. The site includes approvals for a 550,000 SF skyscraper which has 190,000 SF of hotel space.
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New York City Buildings for Sale: |
- 19 apartment buildings comprising 891 units in a mix of walk-up and elevator buildings in Inwood, Washington Heights, and the Bronx are available for sale for about $100 million.
- 522 Fifth Avenue, a 520,000 SF 23-story building is for sale for possible conversion to hotel and condos.
- 551 Fifth Avenue, a 430,000 SF 39-story terra cotter tower is for sale for $200-$250 million.
- 250 West Street, a 363,000 SF 11-story building owned by Citigroup is on the market for about $150 million.
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New York City Retail Leases : |
- Total available New York City Retail Space rose from 0.51 to 0.58 million RSF.
- Midtown South Retail space vacancies rose from 0.25 to 0.29 million RSF while in Midtown vacancy remained set at 0.13 million RSF.
- In Downtown, vacancy rose from 0.12 to 0.15 million RSF.
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New York City Industrial Leases: |
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New York City Buildings Sold : |
- 211 East 46th Street, a residential building was sold to Cammeby’s International for $142 million.
- 150 East 52nd Street sold for $120 million, or $425 per sf.
- 254 West 47th Street is being sold to Trattoria Trecolori for $7.4 million.
- The former Met Life clock-tower overlooking Madison Square Park was sold to Ian Schrager, and will be mostly converted to condos.
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Noteworthy New York City Leases: |
- The City Department of Transportation leased 400,000 SF at 55 Water Street.
- Ross Stores, Inc. leased 165,000 SF at 1372 Broadway for 10 years.
- The City’s Department of Finance leased 75,000 SF at 3000-3002 Third Avenue in the Bronx for its headquarters as part of an initiative to provide jobs to the local community.
- New York Public Radio, WNYC signed a 20-year lease at 160-170 Varick Street for 71,900 SF.
- Bank of America leased 67,000 SF at 1133 Sixth Avenue, nearby its new headquarters the Bank of America tower, which will be completed in 2008.
- Wilson, Sonsini, Goodrich & Rosatia leased 47,500 SF at 1301 Sixth Avenue.
- The American Club leased 25,000 SF at 1 Battery Park Plaza.
- The New Dance Group leased 21,000 SF at 305 West 38th Street.
- Padell, Nadell, Fine & Weinberg is moving from Midtown to 59 Maiden Lane with a 17,625 SF lease.
- Discover Media of Discover Magazine, leased 11,700 SF at 90 Fifth Avenue.
- Juicy Couture leased 8,300 SF at 368 Bleecker Street.
- The New York Landmarks Conservancy leased 8,000 SF at 1 Whitehall Street.
- TPG Rewards leased 5,000 SF on the 27th floor of 111 John Street for 10 years.
- ILW.com, an immigration law firm rented 1,000 SF at 149 Madison for 5 years.
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