Optimal Spaces Inc. (lease office manhattan)
     
 
   
 

March 2005: Manhattan Office, Retail and Industrial Space Update

New York City Office, Retail, Industrial Market Overview

NEW YORK CITY MARKET HIGHLIGHTS

The Midtown Office Market continues to tighten, while the Downtown Office Market remains soft:

With an 8.6% vacancy rate and little new construction planned, the Midtown office market continues to tighten. Midtown office prices will continue to rise unless tenants move Downtown. Two current examples: at Rockefeller Center, Tishman has stopped giving tenants pre-builds meaning that Tenants will have to come out of pocket to complete their offices. Tishman is now giving a cash allowance which will only build a portion of the space. Rents in Rockefeller center now average in the mid $60’s/RSF. Downtown an older Class A building fully built is asking $26.00/RSF. Given the spread in office rents between Midtown and Downtown some firms may make the migration. Since the Downtown office market is already soft, the topping off of 7 World Trade and construction beginning on the Freedom Tower will only dampen any future increases in office rents. 20-30 million square feet of new construction looms resulting from the Midtown-West rezoning. This new construction should restrict increases in office and residential prices given the large increase in supply.

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: Tuesday, April 19th, 2005, 8:30AM-10:30AM
  • Breakfast will be served.

Please email or call (212) 258-2700 to attend.

Breaking Manhattan Real Estate News:

  • West Side Rail Yards Site: TransGas Energy made a $770 million bid on West Side Rail Yards Site. This is the third bid for the West Side rail yards after the MTA opened the bidding to the public (the deadline for the bidding is set for March 21).
  • Fordham University is looking to expand at their Lincoln Center campus by selling or leasing land on Amsterdam Avenue to private developers who would build high rise apartment buildings. The 2,378 million square feet development proposed by the University can be accomplished under current zoning rules. The 1st phase of the expansion plan to be finished in 5-6 years includes a new 16-story Law school and a 5 story campus center.
  • The Harlem Co-op and Condo Market is hot. Prices have since 1995 have seen a 349.3% increase and continue to rise. The median sales number is currently $305,490 compared to $68,000, 10 years ago.

New Manhattan Construction:
  • Major Bloomberg and Governor Pataki broke ground on February 16 for a $236 million project in Harlem that will feature a 204 room Marriott Courtyard Hotel (first major hotel in 40 years), 167,000 square feet of office space, retail stores, health club and approx. 100 residential units.

New York Buildings for Sale:
  • The Met Life Towers on 200 Park Avenue and One Madison Avenue are back on the market.
  • The Riverton Houses in Harlem are on the market and are expected to sell for more then $150 million.

Legend
RSF-Rentable Square Feet
SF- Square Feet
 
new york retail space for lease Graphs and Statistics

New York City Office Rental:

  • Total Manhattan Office Class A vacancies decreased from 20.72 million RSF to 20.35 million RSF, and Total Market vacancies decreased from 35.43 million RSF to 34.72 million RSF.
  • Total Manhattan Office Market Vacancies decreased as Total Direct availability decreased from 28.50 million RSF to 27.60 million RSF even though Total Sublease Lease availability increased from 6.93 million RSF to 7.12 million RSF.
  • Total Manhattan Office Direct Lease availability decreased from 28.50 million RSF to 27.60 million RSF, while Total Sublease vacancies increased from 6.93 million RSF to 7.12 million RSF.
  • Total Manhattan Office Market vacancy decreased as Midtown South availability dropped from 5.71 to 5.48 million RSF and Midtown availability decreased from 19.18 million to 18.45 million RSF. However, Total Downtown Vacancy rates continued to increase from 10.54 million RSF to 10.79 million RSF.
  • Total Vacant Office space in Midtown decreased due to the decrease in Total Direct availability from 14.92 to 14.19 million RSF. However, Total Sublease space availability held steady at 4.26 million RSF.
  • Midtown South Office Direct Lease availability decreased from 4.97 million RSF to 4.74 million RSF, while Sublease vacancies decreased slightly from 0.75 million RSF to 0.74 million RSF.
  • Total Downtown Manhattan office vacancies increased due to an increase in Direct space from 8.61 million RSF to 8.67 million RSF, as well as Sublease availability increasing from 1.93 million RSF to 2.13 million RSF.

New York City Retail Rental:

  • Total Manhattan Retail availability dropped from 0.33 million RSF to 0.32 million RSF, led by an decrease in Midtown availability from 0.12 to 0.11 million RSF while in Downtown and Midtown South availability remained constant at 0.05 and 0.16 million RSF respectively.

New York City Industrial Rental :
  • Total Manhattan Industrial Vacant space decreased from 0.75 to 0.66 million RSF. Midtown vacancy decreases from 0.39 to 0.30 million RSF were responsible for this drop. Midtown South and Downtown vacancy rates continued to remain unchanged at 0.33 and 0.03 million RSF respectively.

Noteworthy Manhattan Leases:
  • Fried Frank Harris Shriver & Jacobson Law Firm signed a 380,000 sf lease at 1 New York Plaza and renewed their existing lease till 2024, locking in on the low rents Downtown.
  • Polo Ralph Lauren Corp. signed a 15 - year lease for 186,000 sf at 625 Madison Avenue. The space was formerly occupied by Revlon.
  • Pace Editions signed a 10-year, 30,500rsf renewal lease at 44 West 18th street.

New York City Buildings Sold:
  • A 50% interest in the Falchi Building in Long Island City (31-00 47th Avenue) has been sold to Dolgin Family partnership for $61million.
  • Peter Kalikow the MTA Chairman is currently in contract with GE Asset Management and L&L Acquisitions to sell 195 Broadway for $270 - $300 million. Kalikow originally bought the building for $75 million in 1983.
  • A five-story townhouse (18.9 feet wide) at 342 West 15th Street between 8th and 9th Avenue in Chelsea was sold for $2.1 million.
  • 85% of the residences at the Milan luxury condos on 300 East 55th street have now been sold by World Wide Group.