June
2004: Manhattan Office, Retail
and Industrial Space Update
Downtown vacancy increased while Midtown and Midtown South vacancy remained largely unchanged. The local economy continues to improve with 4,800 new jobs created last month predominately in the city's film and publishing industries. The local unemployment rate declined to 7.5 percent from 7.9 percent in March. The residential real estate market remains hot, tourism is back and a projected surplus in the city's budget this fiscal year are all positives. The downsides are that only 13 percent of firms expect to hire more workers and there are fears about rising interest rates and their impact on the residential market and the stock market.
SALES:
- Mayflower Hotel and a vacant lot sold have been sold for $401 million dollars or $690 per developable foot and is expected to close by the end of the year.
- Con Edison's planned sale of four large East Side properties to East River Realty Co has been approved. Sales prices will range from approximately $300 million to about $680 million, depending on the level of rezoning approved by the city government. The properties comprise more than nine acres along First Avenue. They include the former Kips Bay Generating Station site between 35th and 36th, a parking lot between 39th and 40th, a Waterside Steam Station between 38th and 40th and a former office site between 40th and 41st.
- 48 East 57th Street a retail townhouse at was purchased for $12.2 million by Jacob Arabo.
- Donald Trump, his brother Robert and sisters Mary Ann Trump Barry and Elizabeth Trump Grau sold their father's 8,000 co-op apartments in Brooklyn and Queens, along with the Trump Village and Shore Haven shopping centers for about $700 million.
- RFR Realty will buy 95 Wall Street for $180 million as part of a five-building package it is buying from the German fund DEGI. RFR is flipping 95 Wall to an investment group headed by Joseph Moinian for $183.8 million.
- The Park Off Organization closed on the residential Macklowe Portfolio for $179 million.
- 140 Broadway was sold to a Deutsche Immobilien Fonds AG, for $465 million or $387 per square foot. Larry Silverstein managed the building for the owner, Morgan Stanley Real Estate Fund III.
- Murray Hill Properties sold its contract to buy the Merchandise Mart at 225 Fifth Ave. for $125 million to a foreign investor who plans on an eventual residential condo conversion
- Clement Moore sold The Chelsea located at 160 West 24th and 167 W. 23rd Street, for $93 million. Berkshire Capital Group, and Lend Lease Real Estate Investments purchased from a joint venture of Pine Equity NY and the Maidman family’s Townhouse Management. The 204-unit, 18-story apartment building has a 50-car garage and six stores.
- 16-18 East 40th Street was sold for $17.3 million. The building is about 103,000 square feet.
- RFR has an option to buy 99 Wall from DEGI, a 100,000 square feet building valued at less than $20 million.
NOTABLE LEASES:
- Whole Foods has leased 87,000 square feet at Chrystie Place development on Houston Street.
PLANNED OFFICE BUILDINGS:
- A new 23-story tower will be built at 140 West 42nd Street a 143,000 square-foot glass tower.
BUILDINGS FOR SALE:
- 233 Broadway aka The Woolworth Building is available either for sale or recapitalization for as much as $400 million. The current owners are hoping to keep a 10 percent stake. The top 150,000 square feet of the 1 million square feet Downtown tower are vacant.
- 600 Third Avenue a 42-story 493,860 square feet tower is coming to market.
- 14 Wall Street, the 1 million square feet landmark Bankers Trust Building is coming to market and could command $150 to $200 a foot and is another candidate for residential conversion.
- 180 Maiden Lane a 1,091,000 square feet Class A office building is coming to market and could go for around $400 million dollars.
|
MARKET
HIGHLIGHTS
|
OFFICE: |
- Total Class A vacancies
decreased from
23.12 million RSF to 23.00
million RSF, while Total Market vacancies decreased from 40.45 million
RSF to 39.90 million RSF.
-
Total Direct Lease availability
decreased from 31.59 million RSF to 31.25 million RSF,
while Total Sublease vacancies
decreased 8.54 million RSF
from 8.86 million RSF.
- Midtown
availability
decreased from 22.57 million RSF to 21.81 million RSF, while Midtown South availability
decreased from 7.46 million to
7.37 million RSF.
Total Downtown Vacancy
rates however increased from 10.43 million RSF to 10.72 million RSF.
- Total
Vacant space in Midtown
decreased as
Total Direct Lease space
availability decreased from 17.18
million RSF to 16.58 million RSF
adding to the fall in Total Sublease availability
from 5.39 million RSF to
5.23 million RSF.
- Midtown
South Direct Lease availability
fell slightly to 6.21 million RSF from
6.23 million RSF, and
Sublease vacancies decreased
slightly as well from 1.23
million RSF to 1.16 million RSF.
- Total
Downtown vacancies
increased as Direct
Lease space increased from 8.19 million RSF to 8.56 million RSF,
even though Sublease
availability decreased from
2.24 million RSF to
2.16 million RSF.
|
|
RETAIL:
|
- Total
Retail availability
decreased
from 0.54 million RSF to
0.52 million RSF.
-
Midtown remains the same at 0.23 million RSF.
- Downtown Vacancy rates
increased from 0.03 million RSF to 0.04 million RSF.
- Total
Midtown South Vacancy rates
decreased
from 0.27 million RSF to
0.25 million RSF.
|
INDUSTRIAL: |
- Total
Industrial Vacant space
increased to 0.86 million RSF
from 0.82 million RSF
due to a increase in Total
vacancies in Midtown from 0.45 million RSF to
0.50 million RSF.
- Total vacancies
in Downtown increased to 0.01 million RSF.
- Vacancies
rates in Midtown South remained unchanged.
|
| |
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 |
10.66
|
4.36
|
15.01
|
9.90% |
-2.52% |
17.02
|
8.27
|
25.29
|
12.10% |
-1.79% |
| Midtown
South |
0.63
|
0.17
|
0.80
|
10.00% |
-1.12% |
1.20
|
0.32 |
1.59 |
10.94% |
-4.41% |
| Downtown
|
5.48
|
1.72
|
7.20 |
12.90% |
6.40% |
9.20
|
2.62
|
11.82 |
16.28% |
-1.55% |
| Total |
16.77
|
6.25
|
23.01 |
10.70% |
-0.51% |
27.42 |
11.21
|
38.62
|
13.07%
|
-1.82% |
|
| |
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 |
16.58
|
5.23
|
21.81 |
9.70%
|
-3.48% |
24.67
|
9.93
|
34.60 |
11.58% |
-2.45% |
| Midtown
South |
6.21
|
1.16
|
7.37
|
9.60% |
-1.19% |
8.78
|
1.79
|
10.57
|
11.30% |
-2.34% |
| Downtown
|
8.56
|
2.16
|
10.72 |
12.70% |
2.74% |
12.81
|
3.28
|
16.09 |
14.86% |
-1.86% |
| Total |
31.35 |
8.54
|
39.90 |
10.30%
|
-1.39% |
46.26
|
15.00
|
61.26
|
12.24% |
-2.10%
|
|
| |
| |
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 |
0.23
|
0.00 |
0.23 |
4.00% |
-3.54% |
0.37 |
0.05 |
0.42 |
6.40% |
1.68% |
| Midtown
South |
0.22 |
0.04 |
0.26 |
8.90% |
-7.87% |
0.39 |
0.04 |
0.43 |
8.29% |
-2.31% |
| Downtown
|
0.04 |
0.00 |
0.04 |
2.50% |
23.68% |
0.04 |
0.00 |
0.04 |
2.73% |
16.67% |
| Total |
0.48 |
0.39 |
0.52 |
5.70% |
-3.67% |
0.80 |
0.09 |
0.89 |
6.72% |
0.45% |
|
| |
| |
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 |
0.47 |
0.03 |
0.50 |
9.20%
|
9.26% |
0.83 |
0.03 |
0.86 |
14.23% |
1.17% |
| Midtown
South |
0.36 |
0.00 |
0.36 |
5.40% |
-1.39% |
0.41 |
0.00 |
0.41 |
5.57% |
-1.21% |
| Downtown
|
0.01 |
0.00 |
0.01 |
1.10%
|
N/A |
0.01 |
0.00 |
0.01 |
1.10%
|
N/A |
| Total |
0.84
|
0.03 |
0.87 |
6.80% |
5.56% |
1.25 |
0.03 |
1.28 |
9.06% |
094% |
|
|
|
| Total
Class A vacancies decreased from
23.12 million RSF to 23.00 million RSF,
while Total Market vacancies decreased
as well from 40.45 million RSF to 39.90
million RSF. |
|
|
|
| Total
Market Vacancies decreased as Total Direct
availability decreased from 31.59 million RSF to 31.35 million RSF
along with the decrease in Total
Sublease Lease availability from
8.86 million RSF to 8.54
million RSF. |
|
|
|
| Total
Direct Lease availability decreased from
31.59 million RSF to 31.35 million RSF,
while Total Sublease vacancies fell to 8.54 million RSF from 8.86 million RSF. |
|
|
|
Total
Market vacancy decreased as Midtown availability
decreased from 22.57 million RSF to 21.81 million RSF and
Midtown South availability decreased from
7.46 million to 7.37 million RSF.
Total Downtown Vacancy rates however,
increased from
10.43 million RSF to 10.72 million RSF.
|
|
|
|
| Total
Vacant space in Midtown decreased due to the
decrease in Total Direct Lease space availability
from 17.18 million RSF to 16.58 million RSF
along with the fall in Total
Sublease availability from 5.39 million RSF to
5.23 million RSF. |
|
|
|
Midtown
South Direct Lease availability fell
slightly from 6.23
million RSF and 6.21 million RSF, and
Sublease vacancies declined from 1.23
million RSF to 1.16 million RSF.
|
|
|
|
Total
Downtown vacancies increased as Direct Lease space
increased from 8.19 million RSF to 8.56 million RSF,
even though Sublease availability decreased from
2.24 million RSF to 2.16 million RSF.
|
|
|
|
| Total
Retail availability decreased from 0.54
million RSF and 0.52 million RSF. In Midtown, availability
remained constant at 0.23
million RSF. Total
Midtown South vacancy rates decreased from
0.27 million RSF to 0.25 million RSF,
while Downtown rates increased to 0.04
million RSF from 0.03 million RSF |
|
|
|
| Total
Industrial Vacant space increased from
0.82 million RSF to 0.86 million RSF due
to a increase in Total vacancies in Midtown
from 0.45 million RSF to 0.50 million RSF,
and Downtown vacancies increased to 0.01
million RSF. Vacancies rates in
Midtown South
remained unchanged. |
|
