August
2004: Manhattan Office, Retail
and Industrial Space Update
MARKET OVERVIEW:
Downtown:
- The downtown markets slowly deteriorate as new buildings are built and additional spaces are vacated as companies relocate.
- Citigroup is moving 1,000 jobs from Downtown Manhattan to New Jersey.
- Goldman Sachs is going to build its own headquarters in Battery Park City leaving still more vacant space Downtown.
- There are still no takers for 7 World Trade Center or for the planned 2.6 million square foot Freedom Tower.
- JP Morgan Chase plans to unload 500,000 square feet of office space downtown in four different buildings in Lower Manhattan, even though none of them is officially on the market.
Midtown and Midtown South: Markets remain flat.
Residential:
- Market remains active though there are questions about what will happen if interest rates continue to rise.
BUILDINGS FOR SALE:
- 1180 Avenue of the Americas. 22-story, fully leased should trade in the $300 to $500 a foot range for each of its 365,000 square feet.
- 110 William Street. The 868,000 square foot Class B building has 97 percent occupancy, and is expected to sell for around $190 a foot equaling around $170 million.
LARGE LEASES:
- Cantor Fitzgerald and eSpeed will take 125,000 square feet at 135 East 57th Street.
BUILDINGS SOLD:
- 125 Park Avenue, bought by Shorenstein Co. for $225 million, or $391 per square foot, is a 25-story, 575,000 square foot building. The 80 year old property strong tenant roster includes magazine publishers Meredith and Reed Elsevier, and Newmark & Co. The seller is Watch Holdings, a subsidiary of GE.
- 170 East End, former Medical Center property, plus two adjacent apartment buildings on 88th Street. Sold to Skyline Developers who plan to create world class, family oriented luxury condominiums featuring spectacular views overlooking Carl Schurz Park, Gracie Mansion and the East River.
- Paramount Hotel sold for $128.5 million to Hard Rock Hotels and Becker Ventures, while Schrager and North Star Capital retained an interest.
- 67-69 Spring Street and 71-73 Spring Street were sold for $15.3 million. 58,000± rentable square feet.
- 61 Broadway sold for $131 million. The seller, Crown Properties bought the building for $58 million from MetLife in 1998, and sold it recently to an investor group.
NAVY YARD EXPANDS:
- Brooklyn Navy Yard Development Corporation unveiled a plan to add 500,000 square feet to the current 3.5 million square feet on land now used by the NYPD tow pound. The city will also create new neighborhood-oriented retail space and launch a 100,000 square feet large scale, food manufacturing complex.
|
MARKET
HIGHLIGHTS
|
OFFICE: |
- Total Class A vacancies
decreased from
23.23 million RSF to 23.19
million RSF, while Total Market vacancies decreased from 39.05 million
RSF to 38.98 million RSF.
-
Total Direct Lease availability
decreased from 30.48 million RSF to
29.81 million RSF,
while Total Sublease vacancies
increased from 8.57 million RSF
to 9.17 million RSF.
- Midtown
availability
increased from 21.86 million RSF to 21.92
million RSF, while Midtown South availability decreased from 6.92 million to
6.91 million RSF. Total
Downtown Vacancy rates decreased as well from 10.27 million RSF to 10.15 million RSF.
- Total
Vacant space in Midtown
increased even though
Total Direct Lease space
availability decreased from 16.44
million RSF to 16.13 million RSF. Total Sublease availability
increased from 5.42 million RSF to
5.79 million RSF.
- Midtown
South Direct Lease availability
rose to 5.81 million RSF from
5.79 million RSF, and
Sublease vacancies decreased
slightly from 1.14
million RSF to 1.10 million RSF.
- Total
Downtown vacancies
decreased as Direct
Lease space decreased from 8.25 million RSF to
7.87 million RSF,
while Sublease
availability increased from
2.02 million RSF to
2.28 million RSF.
|
|
RETAIL:
|
- Total
Retail availability
decreased
from 0.56 million RSF to
0.50 million RSF.
-
Downtown and Midtown Vacancy remains the same at 0.04 million RSF and 0.22
million RSF respectively.
- Total
Midtown South Vacancy rates
decreased
from 0.30 million RSF to
0.24 million RSF.
|
INDUSTRIAL: |
- Total
Industrial Vacant space
increased to 0.96 million RSF
from 0.80 million RSF due to a increase in Total vacancies in Midtown from 0.41 million RSF to 0.53 million RSF.
- Total vacancies
in Midtown South increased to 0.41 million RSF from 0.37 million RSF.
- Total
vacancies in Downtown remained unchanged at 0.02 million RSF.
|
| |
CLASS
A (In Millions of Rentable Square Feet)
|
| |
Vacant Space |
Available now and in the next two years
|
| |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
| Midtown |
10.49
|
4.90
|
15.38
|
10.10% |
0.21% |
16.95
|
8.10
|
25.05
|
11.96% |
-3.84% |
| Midtown
South |
0.62
|
0.14
|
0.77
|
10.10% |
-3.66% |
1.49
|
0.36 |
1.84 |
12.93% |
14.70% |
| Downtown
|
5.09
|
1.92 |
7.01 |
12.10% |
-1.04% |
8.86
|
2.40
|
11.26 |
15.68% |
-3.37% |
| Total |
16.20
|
6.96
|
23.19 |
10.60% |
-0.30% |
27.30 |
10.86
|
38.16
|
12.91%
|
-2.81% |
|
| |
TOTAL
MARKET (In Millions of Rentable Square
Feet)
|
| |
Vacant Space |
Available now and in the next two years
|
| |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
| Midtown |
16.13
|
5.79
|
21.92 |
9.70%
|
0.29% |
24.12
|
9.71
|
33.83 |
11.31% |
-3.41% |
| Midtown
South |
5.81
|
1.10
|
6.91
|
9.40% |
-0.19% |
8.83
|
1.79
|
10.61
|
11.26% |
1.62% |
| Downtown
|
7.87
|
2.28
|
10.15 |
11.90% |
-1.23% |
12.14
|
3.05
|
15.19 |
14.12% |
-2.71% |
| Total |
29.81 |
9.17
|
38.98 |
10.10%
|
-0.19% |
45.08
|
14.55
|
59.63
|
11.90% |
-2.33%
|
|
| |
| |
TOTAL
MARKET (In Millions of Rentable Square
Feet)
|
| |
Vacant Space |
Available now and in the next two years
|
| |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
| Midtown |
0.22
|
0.00 |
0.22 |
3.70% |
-1.37% |
0.35 |
0.05 |
0.40 |
6.05% |
-0.51% |
| Midtown
South |
0.20 |
0.04 |
0.24 |
7.20% |
-25.63% |
0.37 |
0.04 |
0.41 |
7.91% |
-16.06% |
| Downtown
|
0.04 |
0.00 |
0.04 |
2.40% |
7.69% |
0.04 |
0.00 |
0.04 |
2.48% |
7.32% |
| Total |
0.46 |
0.40 |
0.50 |
4.90% |
-12.30% |
0.76 |
0.09 |
0.84 |
6.33% |
-7.71% |
|
| |
| |
TOTAL
MARKET (In Millions of Rentable Square
Feet)
|
| |
Vacant Space |
Available now and in the next two years
|
| |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
Direct |
Sublease |
Total |
%
Vacant |
% Monthly Change |
| Midtown |
0.50 |
0.03 |
0.53 |
9.60%
|
22.74% |
0.74 |
0.03 |
0.77 |
13.00% |
0.00% |
| Midtown
South |
0.41 |
0.00 |
0.41 |
5.70% |
9.07% |
0.46 |
0.00 |
0.46 |
6.23% |
8.01% |
| Downtown
|
0.02 |
0.00 |
0.02 |
3.40%
|
0.00% |
0.02 |
0.00 |
0.02 |
3.34%
|
0.00% |
| Total |
0.93
|
0.03 |
0.96 |
7.20% |
16.42% |
1.22 |
0.03 |
1.26 |
8.97% |
2.94% |
|
|
|
| Total
Class A vacancies decreased from
23.23 million RSF to 23.19 million RSF,
while Total Market vacancies decreased
as well from 39.05 million RSF to 38.98
million RSF. |
|
|
|
| Total
Market Vacancies decreased as Total Direct
availability decreased from 30.48 million RSF to
29.81 million RSF while Total
Sublease Lease availability increased
from
8.57 million RSF to 9.17
million RSF. |
|
|
|
| Total
Direct Lease availability decreased from
30.48 million RSF to 29.81 million RSF,
while Total Sublease vacancies increased
to 9.17 million RSF from 8.57 million RSF. |
|
|
|
Total
Market vacancy decreased as Midtown
South availability
decreased from 6.92 million RSF to 6.91 million RSF
even though
Midtown availability increased from
21.86 million to 21.92 million RSF.
Total Downtown Vacancy rates decreased
as well from
10.27 million RSF to 10.15 million RSF.
|
|
|
|
| Total
Vacant space in Midtown increased due to the
increase in Total Sublease Lease space availability
from 5.42 million RSF to 5.79 million RSF,
in spite of Total
Direct availability decreasing from
16.44 million RSF to
16.13 million RSF. |
|
|
|
Midtown
South Direct Lease availability
increased
from 5.79
million RSF to 5.81 million RSF, and
Sublease vacancies declined from 1.14
million RSF to 1.10 million RSF.
|
|
|
|
Total
Downtown vacancies decreased due to
decrease in Direct space
from 8.25 million RSF to 7.87 million RSF,
even though Sublease availability increased from
2.02 million RSF to 2.28 million RSF.
|
|
|
|
| Total
Retail availability fell from 0.56
million RSF and 0.50 million RSF. In
Midtown and Downtown, availability
remained constant at 0.22 million RSF and 0.04
million RSF respectively. Total
Midtown South vacancy rates decreased from
0.30 million RSF to 0.24 million RSF. |
|
|
|
| Total
Industrial Vacant space increased from
0.80 million RSF to 0.96 million RSF due
to a increase in Total vacancies in Midtown
South from 0.37 million RSF to 0.41 million
RSF, and Midtown vacancies increasing to 0.53
million RSF from 0.41 million RSF.
Downtown vacancies remain unchanged at
0.02 million RSF. |
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