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Office rents in Midtown moderated as the office market cooled over the summer. The question is will the rents pick up if demand picks up given limited availability. Downtown rents remained firm but with Goldman Sachs decision to build a new 2,000,000 SF office building, downtown rents should soften as Goldman’s old space gets put on the market. Retail demand remains firm and retail rents are firm. Industrial rents keep rising as former industrial areas are transformed to alternate uses. For example Meat Packing now trendy, Hudson Yards soon to be residential and office uses and 125th Street to 133rd Street West of Broadway is being converted to Columbia University Campus North.
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Major New Developments: |
- Goldman Sachs has completed their deal to build a $2 billion dollar headquarter in Battery Park City. Goldman will build a 43-story tower diagonally across West Street from Ground Zero. New York City and State agreed on $1.65 billion in tax free liberty bonds as well as $150 million in tax credits.
- The New York Jets are considering building a new stadium in Queens after losing the West Side rail yards.
- The Related Companies and Vornado Realty Trust announced the redevelopment of the Farley Post Office in Manhattan into the Moynihan Train Station. The new station will dedicate 300,000 sf to the transportation facility and will have 850,000 sf of commercial space including retail, restaurants, and a boutique hotel. Madison Square Garden is rumored to be considering moving to the new development.
- The Chinese real estate company, Beijing Ventone, is looking to acquire 1,000,000 sf of office space. Ventone would use the space to attract Chinese firms to New York and provide support services such as translators and conference rooms. New York City officials are pushing for them to lease space downtown in 7 World Trade Center however Bank of America Tower and 1 Bryant Park are also being considered.
- Alexandria Real Estate Equities has agreed to spend $700 million to build an 872,000 sf bioscience center by the East River on the Bellevue Hospital campus. The project is expected to be completed by 2009 and bring over 2,000 jobs to New York.
- Tishman Speyer is the frontrunner to purchase land being sold by New York Law with a bid of $153 million. The deal is contingent on the winning bidder building a new school next door and upgrades on other buildings at cost.
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New York Buildings For Sale: |
- 230 Park Avenue, a 1.2 million sf trophy office building is expected to sell for $600 to $720 million.
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New York City Buildings Sold: |
- 200 East 66th Street, a 583 unit residential building sold for a record breaking $625 million.
- 515 East 72nd, a 410 residential building is in contract for $365 million.
- 20 Park Avenue, 41 Park Avenue, 167 East 82nd and 10 Downing Street, 330 apartment units in total were sold as a package for $200 million.
- 101 West 87th Street and 225 Rector Place were sold for $165 million and will remain rental buildings.
- 1551 and 1555 Broadway and 21 West 34th was sold for $102.5 million.
- 400 East 92nd Street was sold for $97 million.
- 551 Madison Avenue, a 146,000sf office building sold for $90 million.
- 505 West 54th Street, the Foundry a 222 rental unit apartment building was sold for $87.6 million.
- 260 11th Avenue and 549 West 26th street, totaling 230,000 sf of office building were sold for $81 million.
- 387 Park Avenue South, 228,327 sf loft building is in contract for $70 million.
- 141 Fifth Avenue, a 100,000 sf building was sold for $60 million.
- 330 East 56th Street, the Sutton Hotel, was sold for $54 million.
- 25 Fifth Avenue, a 13 story apartment building sold for $46.3 million.
- 156 William Street, a 217,650 sf office building traded at $40.75 million.
- 708 Broadway sold for $39.5 million.
- 550 Fifth Avenue, a 46,000 sf office building was sold for $33 million.
- A package of seven apartment building of 322-324 E. 61st, 237-239 Ninth Avenue, 1582 First Avenue, 514-516 East 88th was sold for $27.65 million.
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New York City Office Rental: |
- Total Manhattan Office Class A vacancies increased from 20.05 million RSF to 20.13 million RSF, and Total Market vacancies decreased slightly from 32.95 million RSF to 32.93 million RSF.
- Total Manhattan Office Market Vacancies decreased as Total Direct availability decreased from 27.18 million RSF to 26.98 million RSF while Total Sublease Lease availability increased from 5.77 million RSF to 5.94 million RSF.
- Total Manhattan Office Direct Lease availability decreased from 27.18 million RSF to 26.98 million RSF, while Total Sublease vacancies increased from 5.77 million RSF to 5.94 million RSF.
- Total Manhattan Office Market vacancy decreased as Midtown South availability dropped from 4.88 to 4.79 million RSF and Midtown availability decreased from 18.18 million to 18.04 million RSF. However, Total Downtown Vacancy rates increased from 9.90 million RSF to 10.10 million RSF.
- Total Downtown Manhattan office vacancies increased with Direct space rising from 8.17 million RSF to 8.23 million RSF, in addition to Sublease availability increasing from 1.72 million RSF to 1.87 million RSF.
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New York City Retail Rental: |
- Total Manhattan Retail availability decreased slightly from 0.43 million RSF to 0.42 million RSF. Midtown South availability stayed flat at 0.22 million RSF while in Midtown availability decreased from 0.13 to 0.11 million RSF. In Downtown, availability dropped from 0.09 million RSF to 0.08.
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New York City Industrial Rental : |
- Total Manhattan Industrial Vacant space decreased from 0.53 to 0.51 million RSF. Midtown vacancy remained constant at 30 million RSF. Midtown South vacancy dropped from 0.22 to 0.21 million RSF. Available Manhattan Downtown Industrial space remains at zero.
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Buildings being Developed/Converted: |
- 133 Water Street is being developed into a 52 residential unit building with ground floor commercial space. Completion is estimated by early 2006.
- 111 Washington Street is being developed into a 460,000 sf residential building.
- 611 Sixth Avenue is being developed into a 60,000 sf residential condominium.
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Noteworthy Manhattan Leases: |
- Time Inc renewed and expanded to 240,000 sf at 135 West 50th Street.
- UBS Securities leased 59,000 sf 237 Park Avenue.
- Firemen’s fund leased 53,500 sf at 1 Chase Manhattan Plaza.
- Assurant leased 50,000 sf at 1 Chase Manhattan Plaza.
- American Capital Strategies leased 37,000 sf at 505 Fifth Avenue.
- MLC Advanced Media took 31,000 sf at 75 Ninth Avenue.
- Citigate Sard Verbinned leased 29,600 sf ay 630 Third Avenue.
- The Robert Allen Group leased 27,882 sf at 11 West 42nd Street.
- Verizon Information Services leased 24,000 sf at 61 Broadway.
- HNTB Corp leased 23,855 at 5 Penn Plaza.
- C.V. Starr leased 23,087 sf at 399 Park Avenue.
- New York Sports Clubs leased 22,206 sf for a health club at 225 Varick Street.
- American Express leased 20,000 sf at 7 World Trade Center, the first tenant in the building.
- AlpInvest Partners took 18,000 sf at 630 Fifth Avenue.
- Flextronics leased 17,832 at 325 Hudson Street.
- Frederic Frekkai & Company leased 15,350 at 610 Broadway.
- Charterhouse leased 14,371 sf at 535 Madison Avenue.
- Beauvais Carpets leased 14,000 sf at 595 Madison Avenue.
- Berkshire Capital renewed for 13,819 sf at 535 Madison Avenue.
- LS Power leased 12,625 sf at 1700 Broadway.
- Kaplan Test Prep Center renewed and expanded to 11,444 at 61 Broadway.
- Ore Hill Partners leased 10,304 at 650 Fifth Avenue.
- Chase leased 9,600 sf for a new branch at 230 Park Avenue South.
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