New York Market Overview
Demand for Manhattan office space exceeds the pace of new construction. As a result office vacancy rates continue to decline and rental rates continue their upward climb.
New Developments
The Federal government has approved $1.3 billion for the Second Avenue subway's first phase. The first phase is expected to cost more than $4 billion and is scheduled to open in 2014.
A new television transmission may make unnecessary the 408-foot spire planned to broadcast tower on of roof the Freedom Tower. If not built, the tower will be reduced from its symbolic 1,776 feet to 1,368 feet tall, the height of Tower 1 before its destruction.
Columbia University's $6 billion plan to double its size by expanding north into Harlem is expected to be approved by the city's Planning Commission next week. Even if a re-zoning is approved, opposition groups threaten lawsuits. Four property owners have not sold to Columbia.
Donald Trump is in a joint venture with Cherokee Investment Partners to redevelop the struggling EnCap development in the Meadowlands, N.J., a $1 billion project to transform Meadowlands landfills into upscale housing and golf courses, plans to build another golf course at a failed development in Fresno, California, called Running Horse and plans to sell Trump Entertainment Resorts Inc.
Plans for a new 75-story tower for a site next to the Museum of Modern Art in Midtown have been unveiled and were commissioned by Hines. The tower will house a hotel, luxury apartments and three floors that will be used to expand its exhibition space. MoMA would get roughly 40,000 square feet of additional gallery space in the new tower, which will connect to its second-, fourth- and fifth-floor galleries just to the east. The $125 million would go toward its endowment.
Retail Marketplace
A mixed-use tower on Jay Street in Downtown Brooklyn is being planned to be built by Bruce Ratner which will be the tallest building in Brooklyn.
Building permits issued in the Bronx increased 6 percent in October compared to last year. A total of 872 permits were issued.
The planned park along the abandoned elevated railway once slated for demolition, has driven about $900 million in new development through the Meatpacking District and West Chelsea. At least 30 new projects have been designed by such architects as Frank Gehry, Robert A.M. Stern, Jean Nouvel and Renzo Piano. Some property owners who once called for the High Line's demise have now embraced it.
Plans were unveiled for developing the Hudson Yards. Tishman Speyer's proposal which has the most office space ranked last. Related's proposal ranked second but drew complaints about a lack of details. Related has since created a video and another model.
Merrill Lynch passed on its move to Vornado Realty Trust's Hotel Pennsylvania site. Larry Silverstein took the opportunity to present the company with a revised deal that would offer a similar space at a cheaper price than Vornado's $1 billion.
Residential Market
Some new residential developments have reduced prices up to 13 percent, as developers try to unload inventory and pay off loans and taxes.
Foreclosures increased by 120 percent in Queens last month, compared to last year. Foreclosures in Manhattan and the Bronx were about the same. They dipped on Staten Island.
The rising rates of home foreclosures will lead to billions of dollars in lost economic activity nationwide in 2008, including $10.4 billion in the New York metropolitan area. The report also estimated home prices across the U.S. will drop an average of 7 percent next year.
Average Residential buildings sales in Manhattan, south of 96th Street, broke $500/SF for the first time. In Upper Manhattan, average sales price of mixed-use buildings increased by 53 percent.
New York state housing officials have closed a loophole that allowed owners pulling out of subsidy programs to immediately raise rents to market rates. In 23 buildings in New York City and Westchester and Nassau counties that are in the state's Mitchell-Lama program.
Developers seem to be scaling back on the number of new condo developments planned for the city. The number of new condominium offering plans submitted to the office of the state attorney general was down 31 percent citywide for the first nine months of the year, going from 20,877 units to 14,351.
The city expects about 14,000 pre-foreclosure filings this year, about double the number recorded in 2004 and 2005. The neighborhoods at greatest risk are Jamaica and Bellrose-Rosedale in Queens and Flatlands-Canarsie in Brooklyn.
Retail
New York City has again been ranked as the world's most expensive shopping destination. Along Fifth Avenue's priciest stretch, between 49th and 59th streets, a 1,000 square foot lease costs about $1.5 million per year, an 11 percent increase over last year. Hong Kong remained the second-most expensive city and Paris remained third.
About 250,000 square feet of retail space is expected to be added this year, compared to 119,000 square feet last year. Retail employment in Manhattan is on track to increase by 1.5 percent, a gain of 36,000 jobs by year's end, compared to 33,000 new hires last year.
New Construction
Savanna Real Estate Fund is planning a 100,000 square foot mixed-use building at 415 Eighth Avenue which SW of Eighth Avenue and 31st street which is across the street from the Farley Post Office and Pennsylvania Station, Savanna purchased the site for $27,850,000.
A new 19 story196 rental apartments, $200 million rental apartment and retail building will be built at the SW corner of Broadway and 72nd Street. The project is being developed by Philip Pilevsky's Philips International and Rhodes NY.
The City Council has approved a $600 million tower planned by Time Equities next to the Battery Tunnel Garage. The 63-story tower at 50 West Street will be a 155-room hotel on the first 14 floors, while 290 condos will take up the other floors.
New York City Retail Leases:
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- Play Garden leases 7,700 SF at 95 Franklin Street.
- Eli Klein Fine Art leases 3,600 SF at 462 West Broadway.
- Dean & DeLuca leases 3,200 SF at 620 Eighth Avenue (New York Times Building).
- Qdoba Mexican Grill leases 3,100 SF at 875 Third Avenue.
- Inakaya leases 3,000 SF at 620 Eighth Avenue (New York Times Building).
- B Yoga leases 2,500 SF at 425 Broadway.
- Vital Dent leases 2,000 SF at 1372 1st Avenue.
- Empanada Mama leases 2,000 SF at 229 Front Street.
- Starbucks leases 2,000 SF at 1411 Sixth Avenue.
- Coffee Designer leases 1,850 SF at 69 West 55th Street.
- Vital Dent leases 1,800 SF at 1100 2nd Avenue.
- Vital Dent leases 1,625 SF at 460 Amsterdam Avenue.
- Red Mango leases 1,600 SF at 182 Bleecker Street.
- Vital Dent leases 1,500 SF at 226 West 72nd Street.
- KlompChing Gallery leases 1,358 SF at 55 Washington Street (Dumbo).
- New York Residence leases 1,100 SF at 63 Wall Street.
- Tumi leases 1,100 SF at 67 Wall Street.
- Variazioni leases 1,000 SF at 214 Mulberry Street.
- Nick and Preston's Imaginarium leases 800 SF at 215 Thompson Street.
- Maoz Vegetarian leases 750 SF at 59 East 8th Street.
- Milli Company Ltd. leases 675 SF at 196 Spring Street.
- Iron Fairies leases 600 SF at 13 St. Marks Place.
- Helanthius NY leases 600 SF at 552 LaGuardia Place.
- Australian Homemade leases 530 SF at 37 East 8th Street.
- House de Lux leases 450 SF at 147 Orchard Street.
- Golden Hammer leases 345 SF at 28 West 44th Street.
- Charmingwall Inc. leases 200 SF at 1-2 Sheridan Square.
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New York City Office Leases:
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- Total Manhattan Office Class A vacancies decreased from 11.35 million RSF to 10.77 million RSF.
- Total Manhattan Office Market vacancies decreased from 21.16 million RSF to 20.32 million RSF.
- Total Manhattan Office direct lease vacancy decreased from 18.16 million RSF to 17.49 million RSF.
- Manhattan Office Sublease vacancy decreased from 3 million RSF to 2.83 million RSF.
- Total Midtown South Office vacancy decreased from 4.09 million RSF to 3.96 million RSF.
- Total Midtown Office vacancy decreased from 11.37 million RSF to 10.75 million RSF.
- Total Downtown Office vacancy decreased from 5.7 million RSF to 5.6 million RSF.
- Total vacant Office Sublease Space in Midtown Manhattan decreased from 1.83 million RSF to 1.71 million RSF.
- Total vacant Office Direct Space in Midtown Manhattan decreased from 9.54 million RSF to 9.04 million RSF.
- Total vacant Office Direct Space in Midtown South Manhattan decreased from 3.71 million RSF to 3.66 million RSF.
- Midtown South Manhattan Sublease vacancies decreased from 0.38 million RSF to 0.3 million RSF.
- Total Downtown Manhattan Office Direct Lease Space decreased from 4.91 million RSF to 4.78 million RSF.
- Total Downtown Manhattan Office Sublease Vacancies increased from 0.79 million RSF to 0.81 million RSF.
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New York City Retail Leases:
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- Total Available Manhattan Retail Space increased from 0.99 million RSF to 1.03 million RSF.
- Midtown South Retail space vacancies increased from 0.7 million RSF to 0.75 million RSF.
- Midtown vacancy increased decreased from 0.22 million RSF to 0.21 million RSF.
- In Downtown, Retail vacancy stayed at 0.07 million RSF.
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New York City Industrial Leases :
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- Total Vacant Manhattan Industrial Space stayed at 0.2 million RSF.
- Midtown South Industrial space vacancies increased from 0.09 million RSF to 0.1 million RSF.
- Midtown vacancy increased stayed at 0.1 million RSF.
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New York City Buildings Sold:
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- 280 Park Avenue was sold for $1.28 billion to Broadway Partners who brought in building tenant Investcorp as a 50 percent partner.
- Larry Silverstein won the bid for 1177 Sixth Avenue a 1,000,000 RSF foot tower at expected to sell $1 billion.
- The Paramount Group bought Deutsche Bank's tower a 700,000-square-foot building located at 31 West 52nd Street for over $500 million.
- 660 Madison Avenue, a 13-story, 254,474 RSF mixed-use building, was sold to Etoile 660 Madison LLC for $375 million.
- 375 Pearl Street, a 32-story, 1.098 million RSF office building, was sold to Taconic Investment Partners for $172 million.
- 138 Lafayette St (Holiday Inn Soho), a 14-story, 227-room hotel, was sold to The Procaccianti Group for $128.6 million.
- 250 West Street, a 311,300 RSF office building, was sold for $201 million.
- 346 West 17th Street, an 11-story, 181,484 RSF office building, was sold to Hampshire Hotels and Resorts for $70 million.
- 414-418 West 14th Street, a 2 office buildings, 28,000 RSF total, was sold to Sitt Asset Management and The Carlyle Group for $70 million.
- 313-317 East 46th Street, a Development site, was sold to Castle Development for $40.95 million.
- 140-54 West 72nd Street, 8 apartment buildings, 54 units total, was sold to SW Management for $37.5 million.
- 90 Lexington Avenue, a 13-story, 107-unit apartment building, was sold to Westbrook Partners for $30.5 million.
- 948-952 Second Avenue, a Development site, was sold to a Manhattan developer for $30 million.
- 87 Chambers Street, a 5-story mixed-use building, was sold to Industrial Buildings Corp. for $23 million.
- 312 Bowery, a 5-story, 22,749 RSF mixed-use building, was sold to Berrin Tekiner for $22.1 million.
- 825 Bronx River Avenue (The Bronx), a 9.5-acre industrial site, was sold to Lighthouse Real Estate Ventures for $16.5 million.
- 245-247 West 14th Street, a 2-story, 10,000 RSF commercial building, was sold to Millennium NY for $12.75 million.
- 2269 First Avenue, a 5-story residential building, was sold to a Manhattan developer for $11.5 million.
- 22-28 Downing Street, a vacant lot, was sold for $10.54 million.
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New York City Office Leases
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- AOL leased 152,000 RSF at 770 Broadway.
- Alliance Bernstein leased 151,500 RSF at 1345 Sixth Avenue.
- Macy's Inc. leased 105,000 RSF at 1440 Broadway.
- Ziff Brothers Investments leased 60,000 RSF at 350 Park Avenue.
- North American Airlines leased 51,500 RSF at Building 141 (JFK International Airport).
- Dentsu leased 45,514 RSF at 32 Sixth Avenue.
- PostWorks New York leased 42,104 RSF at 100 Sixth Avenue.
- Millennium Partners leased 39,000 RSF at 666 Fifth Avenue.
- FJ Sciame Construction Co and Sciame Development Inc. leased 37,000 RSF at 14 Wall Street.
- Keefe, Bruyette & Woods Inc. leased 35,159 RSF at 787 Seventh Avenue.
- Skidmore Owings & Merrill LLP leased 28,548 RSF at 14 Wall Street.
- Corbin Capital Partners LP leased 25,125 RSF at 590 Madison Avenue.
- Zaralo LLC leased 24,049 RSF at 500 Seventh Avenue.
- White Fleischner & Fino LLP leased 22,500 RSF at 61 Broadway.
- DEPFA Bank PLC leased 20,285 RSF at 444 Madison Avenue.
- Peterson Management leased 20,000 RSF at 712 Fifth Avenue.
- Ameriprise International Services leased 14,904 RSF at 530 Fifth Avenue.
- Excelled Sheepskin & Leather Coat Corporation leased 14,785 RSF at 1400 Broadway.
- Offit Capital Advisors leased 14,000 RSF at 485 Lexington Avenue.
- JAKKS Pacific Inc. leased 12,083 RSF at 11 East 36th Street.
- Zimmer Lucas leased 11,577 RSF at 535 Madison Avenue.
- HDR leased 11,200 RSF at 500 Seventh Avenue.
- Allegaert Berger & Vogel LLP leased 10,703 RSF at 111 Broadway.
- Onex Investment Corp. leased 10,000 RSF at 712 Fifth Avenue.
- Tudor Investment Corp. leased 9,100 RSF at 401 West 14th Street.
- Argonaut Management LP leased 8,706 RSF at 546 Fifth Avenue.
- Bag World Imports Inc. leased 8,685 RSF at 10 West 33rd Street.
- Boymelgreen Developers leased 7,962 RSF at 420 Lexington Avenue.
- Cotton Hall Asset Management leased 7,758 RSF at 711 Fifth Avenue.
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