New York City office and retail rents are rising and should continue to rise over the next two years until new construction starts to come online. Companies need to be much more aggressive in evaluating their strategies and options regarding their firms' space needs for offices in New York City. Companies should start to review their space options i.e. extend existing leases, negotiate expansion spaces or evaluate subleasing their current locations and finding a new long term solution. Over the next two years rents are projected to continue to rise and landlord concession packages (free rent, contributions towards build out) are expected to continue to decline.
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New York City Retail Leases: |
- Total available New York City Retail Space rose from 0.68 to 0.71 million RSF.
- Midtown South Retail space vacancies continued to rise from 0.36 to 0.40 million RSF while Midtown vacancy fell from 0.14 million RSF. to 0.13 million RSF.
- In Downtown, vacancy rose from 0.15 to 0.16 million RSF.
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New York City Industrial Leases : |
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Noteworthy NYC Leases: |
- Aon Corporation leased 400,000 SF at 199 Water Street.
- Akin Gump rented 200,000 SF at more than $100/RSF in the Bank of America Building located at 42nd Street and Sixth Avenue.
- Larry Silverstein (at 7 World Trade Center) terminated further lease talks with Vantone, even though Vantone finally submitted the letter of credit.
- Moody's Investors Services is about to sign a lease for 600,000 feet at 7 World Trade Center comprising of 15 full floors of the building.
- Federated Department Stores leased 160,000 SF at 11 Penn Plaza.
- Primedia leased 135,000 SF at 261 Madison Avenue.
- Jeffries & Co. leased an additional 125,000 SF at 520 Madison.
- Seyfarth Shaw leased 100,000 SF at 620 Eighth Avenue.
- Institutional Investor Trust Company of the West leased 86,000 SF at 1251 Sixth Avenue.
- Duane Morris LLP leased 82,000 SF at 1540 Broadway.
- Omnicom Group Inc. leased 54,149 SF at 485 Lexington Avenue.
- Reliance Insurance leased 50,000 SF at 75 Broad Street.
- Sears Holdings Corporation leased 45,000 SF at One Hudson Square.
- Perkins Eastman leased 22,500 SF at 115 Fifth Avenue.
- Tremblant Capital leased 22,000 SF at 767 Fifth Avenue, the GM building.
- H & M rented 25,000 SF on the ground, 2nd floor and basement of 505 Fifth Avenue. Asking rent for the ground floor was reported to be $350 per square foot and $175 for the second floor and $75 for the basement.
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Manhattan Office Space Rentals: |
- Total New York City Office Class A vacancies rose from 16.65 million RSF to 17.03 million RSF, as total vacancy slightly dropped from 27.41 million RSF to 27.40 million RSF.
- Total New York City Office direct lease vacancy rose from 23.25 million RSF to 23.42 million RSF, while sublease vacancy dropped from 4.17 to 3.98 million RSF.
- Total New York City Office Market vacancies dropped as Midtown South Office vacancy rose from 4.30 to 4.35 million RSF.
- Midtown Office vacancy dropped from 13.30 million to 12.92 million RSF while total New York City Downtown vacancy rates rose from 9.81 million RSF to 10.12 million RSF.
- Total vacant Office Space in Midtown New York City continues to decrease led by a decline in total direct from 11.22 to 10.93 million RSF.
- Total vacant sublease space dropped from 2.08 million RSF to 1.99 million RSF.
- Midtown South Office direct lease vacancy rose from 3.79 million RSF to 3.89 million RSF, while vacancies fell from 0.51 to 0.46 million RSF.
- Total Downtown New York City Office vacancies rose with direct lease space increasing from 8.23 million to 8.59 million RSF. Total vacant sublease space continues to decrease from 1.58 to 1.53 million RSF.
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New York City Buildings Sold : |
- 280 Park Avenue, a 1.2 million sf office property, owned by Boston Properties was sold to an affiliate of Istithmar PJSC for $1.2 Billion.
- 1540 Broadway (The Bertelsmann building), a 44-story, 1.1 million sf office and retail property. The office portion of the building was sold to Equity Office Properties and Lehman Brothers for $560 million. The 152,000 sf retail condo was sold to Vornado for $260 million.
- 153 East 53rd Street (Citigroup Center), a 59-story, 1.65 million sf office property was sold to Boston Properties for $400 million.
- 1466 Broadway (Former Knickerbocker Hotel) was sold to Istithmar for $300 million.
- 660 Madison, a 255,000 sf building, was sold to Broadway Partners for $220 million.
- 240 East 27th Street, a 26-story, 292,000 sf apartment building, was sold to Brack Capital for $158 million.
- 597 Fifth Avenue and 3 East 48th Street were sold to Dr. Louai Alassar's A&A Acquistions for $79.1 million for $1,015 a foot for the Scribner's building.
- 250 West Street, a 371,000 sf office property, was sold to Elad Properties for $142 million.
- 24 West 57th Street, a 110,000 sf office building, was sold to APF Properties for $69 million.
- 820 Second Avenue (Diplomat Centre), a 127,657 sf office and retail condominium, was sold to Philips International.
- 240 Church Street was sold to Izak Senbahar and Simon Elias. They plan on building a 306,155 sf residential building.
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