New York Market Overview
Manhattan office and rental rates have stalled, at an all time high, as vacancy rates start to increase modestly.
At the current office rental rates, corporations are exploring cheaper alternatives in Brooklyn, Queens and New Jersey. For instance, Colgate Palmolive and Goldman Sachs are pursuing this strategy as are numerous other corporations and businesses.
7 Subway Extension.
Approval for digging tunnels to extend the No. 7 train has been approved by the MTA, a $1.14 billion contract.
Building Sales.
Last month, Commercial sales fell 67 % over the same period a year ago.
Following Archstone-Smith's recent closing on the acquisition by Tishman and Lehman, insiders see other REITs as potential future targets.
Penn Station.
Penn Station may get a makeover, called the Moynihan Project. It would include 7 million square feet of new development, including two new skyscrapers on either side of One Penn Plaza and up to 1 million square feet of retail space. Surrounding blocks will be designated for manufacturing and will be rezoned for commercial and residential development.
Affordable Housing.
A total of 949 rental apartments will built or restored, including 828 units that will be affordable to low-income families in Manhattan, Brooklyn and the Bronx this year.
Merrill Lynch Headquarters.
Merrill Lynch’s CEO Stan O'Neal resignation could affect the company's plans to move its headquarters from Downtown to the site of Hotel Pennsylvania.
Coney Island.
Thor Equities purchased Astroland amusement park at Coney Island and plans to remain open next summer.
New Residential Website.
UrbanSherpaNY.com, is launching a website to list rental apartments for free.
Gowanus Canal.
Community Board 6 met and the state Department of Environment Protection and the Army Corps of Engineers said the Gowanus Canal clean-up would take longer than expected due to toxic problems. The DEP plans to spend up to $125 million on the problem. Luxury condos are being planned to be built along the canal. Work is scheduled to be done in 2012 or 2013.
Atlantic Yards.
A lawsuit filed by rent-stabilized tenants who claimed their buildings were condemned for the development of Atlantic Yards without necessary approval of the state Division of Housing and Community Renewal. Manhattan was dismissed.
Bank Bailout.
Former Federal Reserve Chairman Alan Greenspan has warned that the $75 billion fund proposed by Citigroup, Bank of America and J.P. Morgan to ease the credit crunch poses serious risks that might not be outweighed by its benefits.
Building Permits.
Manhattan posted the most new permits for a quarter since 2001. However, New York City saw the lowest number of new building permits in three years.
PATH Train Expansion.
The Port Authority plans to spend $500 million on signal work that could boost PATH trains’ capacity by 20 percent. PATH is also to receive $809 million for a new fleet of cars and a new platform technology.
Gibson Dunn Lease.
Law firm Gibson Dunn is to become the first tenant to sign a lease at a new 38-story, 900,000-square-foot office building at the corner of Eighth Avenue and 55th Street. The firm will take 200,000 square feet of the tower, which is being built by Boston Properties and Madison Equities at a. rental price exceeds $100/ square foot.
Downtown Brooklyn.
Downtown Brooklyn is expected to see 14,000 new residential units and 1.5 million square feet of additional office space, funded by $9 billion in private money and $300 million from the city over the next five years.
Insurance Cancellations.
Within the last three years, more than three million homeowners have had insurance policies cancelled by their provider due to an increased threat of hurricanes on the eastern seaboard. An estimated 50,000 New York metropolitan area residents saw their policies cancelled, and many more were hit with increases. Meanwhile the city would be flooded if it was hit directly by a Category Three hurricane.
New Chinatown Wyndham Hotel.
A four-star luxury Wyndham Hotel is coming to Chinatown, on the corner of Bowery and Hester streets. The 18-story, 106-room hotel will be built on the site of the Music Palace. The project is to be completed in about two years.
Hudson Yards Redevelopment.
Rupert Murdoch's News Corporation signed on to the Hudson Yards bid by the Related Companies. News Corp. Five bids to redevelop the massive MTA rail yards on the far West Side were submitted last week. The Extell Development Company would build 12 towers, including one above 1,000 feet, and create a park at the center.
Rezoning of 125th Street.
The city has submitted a proposal for a rezoning of 125th Street. The plan, which would double the allowable building density to 29 stories, would include 2,300 new apartments and more than 600,000 square feet of additional retail space. The area would stretch from Frederick Douglass Boulevard to Second Avenue and 124th to 125th Streets.
New St. Vincent's Hospital.
St. Vincent's Hospital has plans for a new $700 million Greenwich Village hospital. A 21-story hospital will be built between 12th and 13th streets, across the street from its old Seventh Avenue building, where it plans to build luxury housing.
Harry Macklowe debt.
Developer Sheldon Solow is reportedly working with Fortress Investment Group to purchase $900 million of Harry Macklowe's preferred equity debt.
56 Leonard Street.
A Swiss architecture firm Herzog and de Meuron is planning a 57-story tower at 56 Leonard Street. The 410,000 square foot building will be stacked glass cubes with only two units per floor.
Helmsley-Spear.
Developer Kent Swig purchased Helmsley-Spear, the commercial and residential company owned once by Harry B. Helmsley.
New York City Retail Leases: |
- Abercrombie & Fitch Co. leases 40,000 SF at 600 Broadway.
- Bowery Presents leases 40,000 SF at 610 West 56th Street.
- Marian Goodman Gallery leases 14,200 SF at 1414 Sixth Avenue.
- Ana Tzarev leases 14,000 SF at 24 West 57th Street.
- Mauboussin leases 8,400 SF at 714 Madison Avenue.
- Fresco by Scotto leases 8,200 SF at 10 Hanover Square (114 Pearl Street).
- Cafe Frida leases 5,839 SF at 610 10th Avenue.
- Manhattan Carpets leases 5,000 SF at 147 East 23rd Street.
- 35 H&Y Duet Inc. leases 4,700 SF at 304 East 48th Street.
- New York Sports Club leases 4,000 SF at 68 Bradhurst Avenue (The Langston).
- Watch Me Grow leases 3,850 SF at 329 First Avenue.
- T-Mobile leases 3,055 SF at 1180 Sixth Avenue.
- Da Antonio Restaurant leases 3,000 SF at 310 East 44th Street.
- Neutral Ground leases 3,000 SF at 15 West 37th Street.
- Relative Space Inc leases 2,500 SF at 2 Bond Street.
- DeBerardinis Chelsea leases 2,400 SF at 155 West 21st Street.
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| Legend |
RSF-Rentable Square Feet
SF- Square Feet |
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New York City Office Leases:
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- Total New York City Office Class A vacancies increased from 11.19 million RSF to 11.35 million RSF.
- Total New York City Office Market vacancies increased from 20.08 million RSF to 21.16 million RSF.
- Total New York City Office direct lease vacancy increased from 17.29 million RSF to 18.16 million RSF.
- New York City Office sublease vacancy increased from 2.8 million RSF to 3 million RSF.
- Total Midtown South Office vacancy decreased from 3.04 million RSF to 4.09 million RSF.
- Total Midtown Office vacancy increased from 11.28 million RSF to 11.37 million RSF.
- Total Downtown Office vacancy decreased from 5.76 million RSF to 5.7 million RSF.
- Total vacant Office Space in Midtown Manhattan in sublease space decreased from 1.78 million RSF to 1.83 million RSF.
- Total vacant Office direct space increased from 9.50 million RSF to 9.54 million RSF.
- Midtown South Office direct lease vacancy increased from 2.67 million RSF to 3.71 million RSF.
- Sublease vacancies increased from 0.378 million RSF to 0.38 million RSF.
- Total Downtown New York City Office vacancies decreased with direct lease space decreased from 5.12 million RSF to 4.91 million RSF.
- Total Downtown New York City vacant sublease space increased from 0.64 million RSF to 0.79 million RSF.
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New York City Retail Leases:
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- Total available New York City Retail Space decreased from 1.01 million RSF to 0.99 million RSF.
- Midtown South Manhattan Retail space vacancies decreased from 0.71 million RSF to 0.7 million RSF.
- Midtown Manhattan vacancy increased from 0.19 million RSF to 0.21 million RSF.
- In Downtown Manhattan, Retail vacancy decreased from 0.11 million RSF to 0.07 million RSF.
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New York City Industrial Leases :
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- Total vacant New York City Industrial Space decreased from 0.26 million RSF to 0.20 million RSF.
- Midtown Manhattan Industrial Vacancy decreased from 0.11 million RSF to 0.1 million RSF.
- Midtown Manhattan Industrial South Vacancy decreased from 0.14 million RSF to 0.09 million RSF.
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New York City Buildings Sold:
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- The Toy Building at 200 Fifth Avenue sold for $480 million earlier this year.
- 660 Madison Avenue was sold for $375 million. The 13-story building is 254,474 square feet, making the sale price over $1,470 per square foot.
- 222 East 41st Street, a 25-story, 391,000 SF office building, was sold to Wells Real Estate Investment Trust II for $319.8 million.
- 1107 Broadway, a 16-story building, was sold for $235 million.
- 2170 Broadway (On the Avenue Hotel), a 12-story, 265-room hotel, was sold to Highgate Holdings for $201.35 million.
- The 1,590-unit Knickerbocker Village was purchased by the Apollo Real Estate Advisors for $200 million.
- 470 Park Avenue South, a pre-war office building, was sold for $157 million.
- 346 Madison Avenue, a 10-story, 126,000 SF mixed-use building, was sold to Retail Brand Alliance for $137.5 million.
- 1414 Sixth Avenue, a 19-story, 132,000 SF office building, was sold to Murray Hill Properties; David Werner for $120.5 million.
- 322 West 57th Street (The Sheffield), a 109,000 SF office and retail space, was sold to Hearst Corporation for $95 million.
- 321 West 44th Street, a 10-story office building, on the far West Side was purchased by the Kushner Companies for $87.5 million. Kushner plans to raise rents to $45 a square foot from the low 20s.
- 127-135 West 33rd Street, a 16-story building, was sold to Time Equities for $70.5 million.
- 70 West 36th Street, a 16-story, 160,000 SF office building, was sold to Time Equities Inc. for $61.5 million.
- 20 West 57th Street, an 8-story, 37,000 SF building, was sold to Solow Realty & Development Company for $60 million.
- 401 Washington Street, 422 Greenwich Street, a 2 industrial buildings, 67,400 SF total, was sold to 71 Laight Street LLC for $57 million.
- 15-19 West 55th Street, a 2 mixed-use buildings, 100,420 SF total, was sold to Local investors for $50 million.
- 136 Church Street, a 7-story, 37,343 SF building, was sold to a Long Island developer for $30.5 million.
- 25 West 20th Street, a Development site, was sold to Gary Barnett, Extell Development for $28 million.
- 246 Fifth Avenue, a 6-story, 33,818 SF office building, was sold to Argus LLC for $20 million.
- 45-47 West 38th Street, a 6-story, 18,000 SF office building, was sold for $12.5 million.
- 23 East 22nd Street, a Development site, was sold to Slazer Development for $12.5 million.
- 394 Broadway, a 6-story, 29,400 SF building, was sold to a Manhattan investor for $11 million.
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New York City Building Leases
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- Google leased 130,000 RSF at 75 Ninth Avenue (Chelsea Market).
- Ann Taylor Stores Corporation leased 100,000 RSF at 1372 Broadway.
- National Financial Partners leased 99,485 RSF at 340 Madison Avenue.
- Bank Leumi leased 55,253 RSF at 420 Lexington Avenue.
- Monitor Company leased 51,062 RSF at 140 Broadway.
- Niche Media leased 45,000 RSF at 100 Church Street.
- The Regus Group leased 35,000 RSF at 260 Madison Avenue.
- MD Sass leased 33,739 RSF at 1185 Sixth Avenue.
- Junior Gallery Ltd. leased 30,906 RSF at 463 Seventh Avenue.
- New York Marine and General Insurance Company leased 30,165 RSF at 919 Third Avenue.
- Poten & Partners leased 29,411 RSF at 805 Third Avenue.
- Schlesinger Associates leased 21,006 RSF at 500 Fifth Avenue.
- Institutional Credit Partners leased 20,383 RSF at 360 Madison Avenue.
- Thompson Hine LLP leased 18,749 RSF at 335 Madison Avenue.
- The Marie Walsh Sharpe Art Foundation leased 15,533 RSF at 20 Jay Street (Dumbo).
- Kostelanetz & Fink leased 14,000 RSF at 7 World Trade Center.
- BGB Communications LLC leased 11,657 RSF at 99 Hudson Street.
- Volunteers of America leased 11,500 RSF at 601 Eighth Avenue.
- US Bank National Association leased 11,232 RSF at 461 Fifth Avenue.
- Henningson, Durham & Richardson PC leased 11,200 RSF at 500 Seventh Avenue.
- General American Investors Inc. leased 10,750 RSF at 100 Park Avenue.
- TCC Group leased 10,400 RSF at 31 West 27th Street.
- State Bancorp Inc. leased 9,425 RSF at 780 Third Avenue.
- I. Spiewak & Sons leased 8,763 RSF at 463 Seventh Avenue.
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