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Midtown Manhattan and Soho office rents rise as Downtown office rents are flat:
Midtown and Soho Landlords continue to test the market to see how high they can raise their rents while decreasing the value of their contributions for Tenant Work and Free Rent. Soho rental prices which were around $20/RSF 18 months ago are now in the $32-40/RSF range. Plaza district prices have dramatically escalated over the last year as indicated in the value of GM Building which grew from $1.4 billion 18 months ago to $1.7 billion in its most recent appraisal. With limited new construction being completed and with buildings being converted to Residential the commercial, industrial and retail markets will continue to tighten.
Free lecture:
- Come see one of our experts speak about the real estate industry at the North Fork bank.
- Topic: Are all the good deals gone? The future of New York commercial real estate.
- Location: North Fork Bank, 120 West 23rd Street (between 6th and 7th Ave).
- Date and Time: Wednesday, March 9th, 2005, 8:30 AM-10:30 AM
- Breakfast will be served.
Please email or call (212) 258-2700 to attend.
Breaking News:
City Council approval was finally gained for the Hudson Yards. Manhattan’s West Side will soon be rezoned, permitting the construction of 28 million square feet of commercial office space and 12.6 million square feet of residential developments.
Hudson Yards is the underutilized area bounded roughly by West 42nd Street and West 30th Street, and Eighth Avenue to the Hudson River.
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New Manhattan Construction: |
- $475 Million in liberty bonds were authorized in the reconstruction of 7 World Trade Center. It was $75 million more then initially expected.
- 20.6 million land acquisition loan for 126-36 West 19th Street was arranged by Sonnenblick-Goldman on behalf of The Clarett Group which plans to build a luxury condominium on the site.
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New York Development Sites for Sale: |
- Manhattan’s pier 78 is for sale for approximately $10 million.
- 867 Madison Ave at 72nd street, Ralph Lauren’s flagship building, is for sale. It is estimated it will sell for up to $2500 per square foot or $60-70 million for the building. In 1997, TMW property funds purchased the building for $36 million, or $1300 per square foot.
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New York City Buildings Sold: |
- The Fashion Gallery Building at 1412 Broadway was sold for $105 million.
- 610 Lexington Ave: the YMCA site was sold for $31.5 million to Aby Rosen and Michael Fuchs. A 50 story development of residential condos is planned.
- The Stanhope hotel on 5th Ave was sold to Gary Barnett of Intell Management and is planned to be converted to a luxury co-op.
- 322 W. 57th, a 50 story rental building, was sold to Kent Swig and for $418 million and will be converted to condos.
- Plaza Hotel owner Miki Nafatali purchased 650 Sixth Ave. for $50 million or $450 a square foot. Current retail tenants include Kinko’s and the Children’s Place.
- 16-18 40th Street, a 100,000 sq. ft. building, was sold for $19.5 million.
- 11 E. 36th, a 12 story, 97,000 square foot building was sold for $16.825 million to the Bobker group.
- An eight-story office building with a penthouse at 373 Fifth Avenue was sold by Massey Knakal Realty Services for $9.5 million.
- Ocean apartment development in Brighton Beach has already completed 20 sales of $1 million dollars or more and additional units are on the way.
- 28 West 44th St. was purchased by SL Green Realty Corp. for $105 million.
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New York City Office Rental: |
- Total Manhattan Office Class A vacancies decreased from 20.89 million RSF to 20.72 million RSF, while Total Market vacancies increased slightly from 35.37 million RSF to 35.43 million RSF.
- Total Manhattan Office Market Vacancies increased slightly as Total Direct availability increased from 28.32 million RSF to 28.50 million RSF even though Total Sublease Lease availability decreased from 7.05 million RSF to 6.93 million RSF.
- Total Manhattan Office Direct Lease availability increased slightly from 28.32 million RSF to 28.50 million RSF, while Total Sublease vacancies decreased from 7.05 million RSF to 6.93 million RSF.
- Total Manhattan Office Market vacancy increased slightly as Midtown South availability stayed more or less steady at 5.71 million RSF and Midtown availability decreased from 19.31 million to 19.18 million RSF. However, Total Downtown Vacancy rates increased from 10.35 million RSF to 10.54 million RSF.
- Total Vacant Office space in Midtown decreased due to the decrease in Total Sublease space availability from 4.35 million RSF to 4.26 million RSF, in addition to Total Direct availability decreasing from 14.96 million RSF to 14.92 million RSF.
- Midtown South Office Direct Lease availability increased slightly from 4.95 million RSF to 4.97 million RSF, while Sublease vacancies decreased slightly from 0.76 million RSF to 0.75 million RSF.
- Total Downtown Manhattan office vacancies increased due to an increase in Direct space from 8.41 million RSF to 8.61 million RSF, even though Sublease availability decreased from 1.94 million RSF to 1.93 million RSF.
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New York City Retail Rental: |
- Total Manhattan Retail availability rose from 0.31 million RSF to 0.33 million RSF, led by an increase in Downtown availability from 0.03 to 0.05 million RSF while in Midtown and Midtown South availability remained constant at 0.12 and 0.16 million RSF respectively.
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New York City Industrial Rental : |
- Total Manhattan Industrial Vacant space decreased from 0.83 to 0.75 million RSF. Midtown vacancy decreases from 0.42 to 0.39 million RSF and Midtown South vacancy decreases from 0.38 to 0.33 million RSF were responsible for this drop. Downtown vacancy rates continue to remain unchanged at 0.03 million RSF.
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Noteworthy Manhattan Leases: |
- Bank of America is close to a deal for 165,000 square feet of immediate space in Tishman Speyer’s 50 Rockefeller Plaza with an additional 170,000 square feet to be taken in the next 60 days when the previous tenant vacates.
- Abyssinian Development Corp. signed a 12-year, 14,400 square foot sublease at 4 W. 125th St in Harlem. They will pay over 4.3 million dollars over the life of the lease.
- Designer Phillip Adec is moving from 209 W. 38th to a 12,000 square foot entire floor space in 213 W. 35th St.
- Jerry Della Femina is moving his ad agency from the Daily News building at 220 E. 42nd to 902 Broadway in the Flatiron district. They signed a lease for 16,500 square feet for the entire 15th floor. The asking rent was listed at $29 a square foot.
- York Capital is moving to the GM building. They are taking the entire 17th floor of 35,537 square feet for under $100 a foot.
- Morgan Stanley signed a 10-year, 400,000 square foot sublease at One New York Plaza, one of the largest subleases for financial services in downtown Manhattan since 9/11. The asking rent was in the $20s while comparable space in midtown would be in the $50s.
- Wachovia took 180,000 square feet at 375 Park, the Seagram Building.
- A 321,285 square foot lease was renewed early by French bank BNP Paribas at AXA-owned 787 Seventh Ave.
- 1258 Sixth Ave. in Rockefeller Center was leased to the shoe store Nine West. The entire three-story building is across from Radio City Music Hall and has about 6,840 square feet.
- King & Spalding leased another 52,800 square feet at 1185 Avenue of the Americas and now occupies a grand total of 221,576 square feet in the 42-story building.
- Global Law Firm acquired an Additional 80,000 square feet totaling 320,000 in a 15-Year Deal at a Tishman Speyer-owned Property.
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