New York Market Overview
Office:
Landlords usually ask tenants to show proof that they are in good financial standing and can be expected to pay rent every month.Tenants are now asking landlords to open up their books and provide protection in case they go under. Tenants are taking a closer look at the capital stack of buildings and considering the exact implications of a landlord defaulting on their obligations.
Distress in U.S. office real estate jumped to $24.8B at the end of the second quarter, up $6.7B from the previous three-month period. Office is now the most distressed commercial real estate asset type for the first time since 2018, surpassing retail and hotels. Brookfield, Blackstone and Related Cos. have all handed back properties to lenders, and defaults have been shooting up across the country.
Canaccord Genuity Group signed a lease for 75K SF at Penn for 1, 370 SF.
Goulston & Storrs is renting 30,000 sf for a single floor in a relocation to 730 Third Avenue for a 10-year lease.
GTS is renewing its lease at 545 Madison Avenue. GTS signed a two-year lease extension for its 30,000 SF office across four floors.
Puig, the home of Love Brands, is moving into 25,0000 SF, for the entire 32nd floor at 45 Rockefeller Plaza.
Transel Elevator & Electric, or TEI Group signed a 23,000 SF lease renewal for the sixth floor with another 10 years at 30-30 47th Avenue.
Retail:
New York City retail might be rebounding, but the damage done by the "retail apocalypse" and then the pandemic is far from over.The Manhattan retail market is getting better as a result of an increase in tourism and lower asking rents enticing tenants to sign deals. In 10 of the 17 retail corridors examined, lower asking rent was driving a return of retailers with streamlined business models, such as Century 21’s reopening at 22 Cortlandt Street with 100,000 square feet or Barnes & Noble’s renew lease on Upper East Side with 16,744 square feet at 1556 Third Avenue. From January to June of this year, asking retail rents were 30% below their 2016 peak in 13 of the 17 corridors. Landlords are having to give away fewer concessions and asking rents are on the rise as major retailers sign leases for spaces that are smaller than pre-covid.
A Brooklyn retail property, new appraisal found its value had dropped by 88% after two major departures left it vacant. The value of the 102K SF retail building at 94-110 Court Street in Brooklyn Heights has dropped from $48.7M in 2013 to just $5.7M in a recent appraisal.
