New York Market Overview
Manhattan Office:Manhattan office leasing in the second quarter of 2020 totalled just 3.18 million square feet. That is 50% of the prior quarter and down 72% year-over-year. This is the slowest quarter for Manhattan office leasing since 2009.
Office workers have been working from home during Covid. How many will remain at home after Covid has yet to be determined.
Midtown saw 1.88 million square feet in leasing activity in the quarter, down 52% year-over-year.
Midtown South leasing activity declined 87% year-over-year to just 640,000 square feet.
Leasing activity downtown fell 73% year-over-year to 660,000 square feet.
Manhattan’s Office availability rate increased 0.4% points to 10.6%, the highest since early 2015. Over 10% is considered to represent a Tenant Market
Sublease space made up approximately 25% of available office space in Manhattan Sublease space is likely to be more than 30% by the end of 2020. Asking rents were flat on an average of $79.32 per SF. Roughly one in four NYC office employers are planning to shrink their office space by a minimum of 20%. Covid has pushed companies like Twitter, Facebook, Microsoft, Google and Amazon to rethink their office footprints and consider letting employees work remotely long-term.
JPMorgan will allow employees to rotate working from home after the pandemic subsides. JPMorgan bank is moving forward with its plans to build a new 2.5 million- square-foot headquarters on Park Avenue, which is more than 1 million square feet larger than its existing tower and is intended to accommodate up to 15,000 employees.
The largest Office leases in June: TikTok’s 232,000-square-foot lease at 151 West 42nd Street was the largest office lease. Match Group signed a 41,000-square-foot lease at 60-74 Gansevoort Street. U.S. Securities and Exchange Commission rented 241,000 square feet at 100 Pearl Street.
Manhattan Retail:Many new chains declared bankruptcy last month, with increased store closures occurring.
Landlords with clothing stores, gyms and theaters as tenants have seen rent collections remain low.
TW Retailwinds, whose other brands include Fashion to Figure and Happy x Nature, filed for 11 protection.
Brooks Brothers, which has 500 stores across the globe, filed for Chapter 11 bankruptcy protection. Brooks Brothers will use the bankruptcy process to find a buyer for the business. The company has a $75 million debtor-in-possession loan from WHP Global, which gives the lender a senior lien on Brooks Brothers’ assets.
Bed Bath & Beyond will close 200 stores over the next two years. half during its latest quarter. Bed Bath & Beyond will begin to permanently close a portion of its locations later this year.
Maison Kayser is looking to exit its leases for all of its NYC locations. The bakery opened its first U.S. store in 2012 on the Upper East Side and has since expanded to 15 bakeries in Manhattan, including Hudson Yards, Columbus Circle, and Union Square.
J.C. Penney’s bankruptcy will close nearly a third of its 846 stores over the next two years as part of its bankruptcy restructuring, and is laying off all of its employees in its Kings Plaza and Manhattan Mall locations. The 150,000-square-foot Penney at 100 West 33rd Street.. The store will close at the end of the month, costing 304 employees their jobs. At the end of last year J.C. Penney had roughly $3.8 billion in debt.
J.C. Penney is an anchor tenant for Kings Plaza Mall in the Flatlands section of Brooklyn, where 142 employees are being laid off through the store’s last day, Sept. 27.
JC Penny is hoping Authentic Brands Group, along with Simon Property Group and Brookfield Property Partners, are reportedly in talks to buy the retailer.
Building Sales:New York’s first-half investment sales volume was $9.65 billion, a decline of 45% compared to the second half of 2019. Manhattan suffered the biggest dollar dip. It saw $5.6 billion in transactions in the first half of 2020, a 41% drop from the previous six months.
Hotels:Hotels In New York City, occupancy levels (which do not take into account closed hotels) have fallen for six straight weeks after ticking up in May.
Hotels’ CMBS loan delinquencies were 21.6% last month, up from 13.6% in May. Retail CMBS delinquencies were 12.8% and mixed-use properties delinquincesi 9.4%,
Bryant Park Hotel located at 40 W. 40th St. is being converted to office space. The entire landmarked building is being offered as “boutique’ office space. 122,000 square feet on 25 floors are available in sizes from 1,900 to 7,535 square feet. between Fifth The Omni Berkshire on Madison Avenue also will likely be converted to offices while other inns are being used as temporary homeless shelters