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The Manhattan office market continues to tighten to record low vacancies with only one new office building nearing completion (Hearst headquarters at 959 Eighth Avenue).
Office, industrial, and retail vacancy rates dropped steadily throughout 2005 in all Manhattan neighborhoods, resulting from limited supply and ever-increasing demand space.
Specifically, in the last month, all vacancy rates approached low figures not seen since the beginning of 2002. The total office market was the hottest spot, reaching all-time record lows across all neighborhoods since Optimal Spaces first started taking statistics at the end of 2001. Even the downtown office market, which had been weak following the 9/11 attacks, has dipped to 10% vacancy.
Goldman Sachs broke ground this month on a new 2 million square foot headquarters Downtown.
The Freedom Tower at the WTC site is scheduled to break ground in six months, which will contain 2.6 million square feet . However, these developments are still a couple years from completion. We expect the real estate market to remain tight for 2006.
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Major New Developments: |
- TDeveloper Sheldon Solow submitted plans to the city to build a 4.2 million sf, high-end residential and commercial building on Con Edison’s Waterside Steam Plant located on the east side on First Avenue from 41st Street to 38th Street.
- Developer Joseph Sitt is in negotiation for the purchase of the South Street Seaport.
- The landmark New Yorker Hotel at 481 Eighth Avenue was sold and is undergoing a $43 million refurbishment.
- Bank of America plans to move from its 900,000 sf of office space at 9 W. 57th Street into 1.1 million sf at One Bryant Park at Sixth Avenue and 42nd Street in early 2009.
- The ferry terminal at St. George has finished a $130 million renovation.
- 485 Fifth Avenue and the Apple Bank Building at 2112 Broadway and 200 W. 72nd Street are reported to be planned to become residential condominiums.
- A group of developers just closed on the 49-year lease of a 13,500 foot parcel at 500 W. 23rd St. and Tenth Avenue next to the High Line, where they will construct a 15-story rental with over 100,000 sf.
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New York City Buildings for Sale: |
- The 20-story Holiday Inn Express at 13-15 West 45th Street is in contract to sell later this year for $32 million.
- The 65,000 sf Western Beef Building in the Meatpacking District is under contract and will become a high-end retail and office building.
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Noteworthy Manhattan Leases: |
- Google leased 311,000 sf of office space at 111 Eighth Avenue.
- DHL has signed a lease for 250,000 sf of space at 500 Tenth Avenue.
- Citigroup has leased 250,000 sf of office space at 787 Seventh Avenue.
- New York State Department of Transportation extended its 106,000 sf lease at 47-40 21st Street.
- CIT Group is close to leasing a 100,000 feet at 11 W. 42nd Street.
- Computer Associates has leased 67,167 sf at 520 Madison Avenue.
- Visiting Nurse Service of New York has leased 53,000 sf in Kingswood Center.
- Nature America Inc. has leased 52,350 sf at One Hudson Square.
- Bartle Bogle Hegarty signed a lease for 43,000 sf at 32 Avenue of the Americas.
- The Museum of American Finance is moving into 30,000 feet that includes the historic banking hall at 48 Wall Street.
- Merrill Lynch leased 28,000 sf of space at the top of 623 Fifth Avenue for client conferences and special events.
- The Weinstein Company leased 27,000 sf at 345 Hudson Street.
- The Broadway Atlantic Theater company school leased 25,000 square feet at 111 Eighth Avenue.
- Herman Miller is moving in to a 23,980-foot space in 1177 Avenue of the Americas.
- The Culinary Academy of New York has expanded by 18,000 sf at 154 West 14th Street.
- Development Capital has leased a floor at 645 Madison Avenue.
- Veritas Capital has leased space at 590 Madison Avenue.
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New York City Office Rental: |
- Total Manhattan Office Class A vacancies decreased from 18.31 million RSF to 17.73 million RSF, and Total Market vacancies decreased from 30.25 million RSF to 30.21 million RSF.
- Total Manhattan Office Market Vacancies decreased although Total Direct availability increased from 25.18 million RSF to 25.49 million RSF because Total Sublease Lease availability decreased from 5.07 million RSF to 4.73 million RSF.
- Total Manhattan Office Direct Lease availability increased from 25.18 million RSF to 25.49 million RSF, while Total Sublease vacancies decreased from 5.07 million RSF to 4.73 million RSF.
- Total Manhattan Office Market vacancy decreased even though Midtown South availability rose from 4.58 to 5.12 million RSF because Midtown availability dropped from 16.21 million to 15.83 million RSF. Meanwhile, Total Downtown Vacancy rates decreased from 9.47 million RSF to 9.27 million RSF.
- Total Vacant Office space in Midtown decreased led by a decrease in Total Direct availability from 13.27 to 13.04 million RSF. Total Sublease space availability decreased from 2.94 to 2.79 million RSF.
- Midtown South Office Direct Lease availability increased from 4.26 million RSF to 4.82 million RSF, while Sublease vacancies dropped from 0.32 to 0.30 million RSF.
- Total Downtown Manhattan office vacancies decreased with Direct space dropping from 7.66 million RSF to 7.63 million RSF, in addition to Sublease availability decreasing from 1.81 million RSF to 1.64 million RSF.
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New York City Retail Rental: |
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New York City Industrial Rental : |
- Total Manhattan Industrial Vacant space decreased from 0.51 to 0.46 million RSF. Midtown vacancy decreased to 0.28 million RSF from 0.33 million RSF. Midtown South vacancy remained constant at 0.18 million RSF. Available Manhattan Downtown Industrial space remains at zero, as it has been for 7 months.
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New York City Buildings Sold: |
- 563 Eleventh Avenue, the Verizon Building was purchased for $120 million and will be redeveloped to residential condominiums.
- 104 West 40th Street, the Spring Mills Building sold for more than $120 million.
- 90 Broad Street, a 400,000 sf building sold for just under $90 million.
- 1438 and 1430 Third Avenue, two residential rental buildings sold for $85 million.
- 59 West 44th Street, the 174-room Algonquin Hotel, sold for $74 million.
- 387 Park Avenue South, a 228,237 sf office building traded for $70.1 million.
- 50 W. 57th St, a 80,000-foot office building is being sold for about $52 million.
- 15 Central Park West, a 10,700 sf penthouse condominium was sold for $45 million.
- 110 East 55th Street, a 19-story office building sold for $33.5 million.
- 2 East 63rd Street sold for $31.25 million.
- The Beacon High School a 4-story, 73,500 sf building on West 61st Street was purchased for $31.2 million. They plan to construct a new luxury residential building when the Board of Education’s lease expires in 2010.
- 37-39 West 24th Street was purchased for $6.6 million by McSam Hotel.
- 46 East 61st Street, a 12,000 sf townhouse was purchased by Graff to serve as its headquarters.
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| Legend |
RSF-Rentable Square Feet
SF- Square Feet |
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December 2005 Graphs and Statistics
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