|
New York City Office, Retail, Industrial Market Overview |
|
Midtown New York City Office Space
Office space continues to tighten in Midtown with no end in sight. Landlords continue to offer only partial buildouts, often at base rental rates higher than with a full buildout a year ago. Rents continue to rise as fast as tenants can take the space. This has caused many mid-sized and small firms to move Downtown, creating a buzz of activity in Lower New York City. Vacancy rates continue to decline there as well. The new developments surrounding the World Trade Center represent the best opportunity for relief of scarcity of vacant space in New York City.
Downtown New York City Office Space
On April 27th, ground was finally broken on the Freedom Tower. After months of fighting between the City, the State, and Larry Silverstein, a deal was reached which allows the Port Authority to gain control of the $2 billion centerpiece Freedom Tower, as well as Tower 5, a mixed residential and office building on Liberty Street.
Silverstein will still develop the Freedom Tower but will return it to the Port Authority once completed. The tower is planned to be 1,360 feet tall, the same as the old World Trade Center buildings. Since the building will have a 1,776 foot spire in honor of the Declaration of Independence, it will be taller than any building currently existing when completed in 2011. It will also have a 20-story concrete base which will not contain any retail or office, and has been criticized as being fatal to the building’s success.
On the other hand, it has been deemed necessary to protect the building from further attack. There are no confirmed tenants yet for the building although several federal and state agencies have expressed interest. Silverstein will also maintain control over Towers 2, 3, and 4 on Church Street.
In total more than $20 billion dollars will be invested into the Downtown area over the next six years, half within a couple blocks of the WTC complex. In addition to the five WTC buildings, a new Path Station will be built along with a memorial and a retail center.
A residential building is planned on the site of the badly damaged Deutsche Bank, and the Fulton Street transit hub is in the process of being renovated. Nearby, Goldman Sachs is continuing construction on its $2 billion headquarters. Several other big residential towers are planned in the area, including a 75-story tower to the east that will include space for a school.
When completed, the WTC site alone will introduce more than 10 million square feet of office space into Downtown New York City. The redevelopment effort has been compared by some to the Big Dig in Boston, or redeveloping New Orleans after Katrina.
|
New York City Retail Leases: |
- Total available New York City Retail Space rose from 0.58 to 0.61 million RSF. Midtown South Retail space vacancies dropped from 0.29 to 0.27 million RSF while in Midtown vacancy jumped from 0.13 to 0.16 million RSF. In Downtown, vacancy rose from 0.15 to 0.17 million RSF.
|
|
New York City Real Estate Developments: |
- Mayor Bloomberg and Governor Pataki jointly named Leslie Koch head of the commission to redevelop the 172 acre Governor’s Island. Recently ceded to the state and city from the federal government, the island will soon be open for development, with many proposals currently on the board. The government has committed $120 million for preservation alone, and has been soliciting proposals about possible plans for the island in the middle of New York Harbor.
- Construction began on 306 and 313 Gold Street in Downtown Brooklyn. The towers, together totaling 650,000 SF, are being constructed under new regulations for high-density zoning in Downtown Brooklyn, and will cost $400 million. After completion, 306 Gold Street will be the tallest building in Brooklyn.
- 80 and 100 Riverside Boulevard between 63rd and 65th street are being developed into two condominium buildings for a price of $100 million, and will total about 750,000 SF.
- The federal, state, and city governments combined to provide $36 million to clean up and redevelop the Bush Terminal Piers. Located between 43rd and 51st Streets on Brooklyn’s waterfront, the Piers will be developed into a park and recreation area including restaurants and limited retail.
- RoseTree Developments bought vacant lots at 117 West 123rd Street and 129-131 West 123rd Street in Harlem along with applicable air-rights to building 55,000 SF of luxury condos.
|
Manhattan Office Space Rentals: |
- Total New York City Office Class A vacancies decreased from 16.82 million RSF to 16.24 million RSF, while total market vacancy decreased from 27.74 million RSF to 27.42 million RSF.
- Total New York City Office direct lease vacancy decreased from 23.23 million RSF to 22.90 million RSF, while total sublease vacancy increased from 4.50 to 4.52 million RSF.
- Total New York City Office Market vacancies decreased again even though Midtown South Office vacancy rose from 3.98 to 4.31 million RSF. Midtown Office vacancy dropped from 14.92 million to 14.48 million RSF and total New York City Downtown Office vacancy rates also decreased from 8.84 million RSF to 8.63 million RSF.
- Total vacant Office Space in Midtown New York City decreased led by a decrease in total direct lease space from 12.64 to 12.19 million RSF. Total vacant sublease space dropped slightly from 2.29 to 2.28 million RSF.
- Midtown South Office direct lease vacancy increased from 3.43 million RSF to 3.67 million RSF, while sublease vacancies rose from 0.55 to 0.64 million RSF.
- Total Downtown New York City Office vacancies decreased with direct lease space decreasing from 7.17 million RSF to 7.04 million RSF and sublease vacancy decreasing from 1.67 to 1.59 million RSF.
|
New York City Industrial Leases : |
|
|
|
New York City Buildings Sold : |
- 280 Park Avenue, comprising 1.2 million SF in a 30-story building with a 43-story tower was sold to an unidentified buyer for $1.2 billion.
- 522 Fifth Avenue, the 23-story current headquarters of JP Morgan was sold for $420 million to Broadway Real Estate Partners, and may undergo partial conversion to condos.
- 509, 535, and 545 Fifth Avenue (the Zeus Portfolio) was sold to the Moinian group for $270 million. The buildings comprise 600,000 SF of office and retail.
- 180 Montague Street, a 33-story residential tower with 192 units was sold to Archstone-Smith for $101 million.
- 119 West 40th Street and 120 West 41st Street were sold to AEW Partners for $100 million.
- 370 Lexington Avenue at 41st Street, a 296,000 SF office tower was sold to Broad Street Development and Crow Holdings Realty Partners for $97.2 million.
- 124 West 24th Street, a six-story, 33,000 SF residential building with about 6,000 SF of retail was sold to Metro Development Company for $15 million.
|
|
Noteworthy New York City Leases: |
- Bank of America leased an additional 522,000 SF at its soon-to-be completed building in One Bryant Park, giving it a total of 77% of the building’s space.
- Scholastic, children’s media and publishing leased 88,000 SF at 520-524 Broadway.
- Barnes & Noble and H&M signed leases for a total of 85,000 SF at a planned 400,000 SF building at the corner of East 86th Street and Lexington Avenue.
- Coty Inc, the largest fragrance company in the world signed a 16-year lease for 75,000 SF at 2 Park Avenue.
- KBC Bank NV leased 50,000 SF at 1177 Sixth Avenue for 15 years, comprising the seventh and eighth floors.
- Yahoo! leased an additional 40,000 SF bringing its total to 74,000 SF at 1065 Sixth Avenue, the location of its New York headquarters.
- The Jewish Community Centers Association signed a 20-year lease for 31,000 SF at 520 Eighth Avenue.
- The Galleon Group hedge fund signed a 25,030 SF lease at 590 Madison, the IBM building, comprising the 34th floor.
- International Securities Exchange leased 22,135 SF at 60 Broad Street expanding to the 29th floor.
|
|
|
