market research

February 2020

February 2020 New York Commercial Real Estate Market Report

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Office: Manhattan office leasing remains at an all time high, led by technology firms. There were 145 leases with rents starting at over $100/RSF.

Retail: Manhattan retail leasing was off 9% from the previous month. With additional announcements of store closures, there will be increased pressure for Landlords to lower asking prices.

Building Sales: Buildings sales volume dropped as residential rental sales were reduced by 2/3rds by the new law limiting rent increases. Now, an additional law was passed that residential landlords will now have to pay the brokerage fee.

New York Market Overview

Total Manhattan office leasing activity was up 2.9% from last year, reaching 42.97 million square feet and up 28.4% above the ten-year average. Average asking rents dipped slightly to $78.75 at the end of the year, following a few large above-market deals.

Midtown South had 16.41 million square feet in leasing activity, a 14.5% increase from 2019. With an overall average asking rent of $76.70.

Midtown office leasing hit a new all-year high with 2,750,000 square feet in leases signed, up 58% year-over-year. Availability rate of 11.3%, with base rent average fell by nearly $2 to $87.003. Facebook’s 1.5 million-square-foot lease across three buildings at Hudson Yards accounted for more than half of all Midtown space leased.

Midtown South saw a total of 430,000 square feet in leases signed, down 38% year-over-year. The availability rate rose to 9.8% and the average asking rent fell to $83.67 per square foot.

Downtown leasing volume increased almost 70% year-over-year, totalling 10.7 million square feet the highest total this century, surpassing 2000’s total of 10.04 million square feet. Asking rents rose to $64.60 per square foot. The largest deal in this submarket, and citywide, went to the investment bank Morgan Stanley, which renewed its 1.25 million-square-foot lease at 1 New York Plaza.

Manhattan Office:


The top 10 office leases comes to 945,500 square feet:
  1. Amazon signed a lease at 410 Tenth Avenue for 335,000 square feet. The landlord is Newmark Knight Frank.
  2. Akerman signed a lease at 1251 Sixth Avenue for 100,000 square feet. The landlord is Mitsui Fudosan America.
  3. Mazars USA signed a lease at 135 West 50th Street for 90,000 square feet. The landlord is George Comfort & Sons.
  4. Strategic Financial Solutions signed a lease at 711 Third Avenue for 82,557 square feet. The landlord is SL Green Realty.
  5. Cozen O’Connor signed a lease at 3 World Trade Center for 77,000 square feet. The landlord is Silverstein Properties.
  6. 29Rooms signed a lease at 25 Kent Avenue for 64,900 square feet. The landlords are Rubenstein Partners and Heritage Equities Partners.
  7. Kith signed a lease at 25 Kent Avenue for 58,000 square feet.
  8. Squarespace signed a lease at 225 Varick Street for 50,000 square feet. The landlords are Trinity Real Estate, Norges Bank Real Estate Management and Hines.
  9. Greenberg Traurig signed a lease at 420 Lexington Avenue for 46,744 square feet. The landlord is SL Green Realty.
  10. Next Jump signed a lease at 512 West 22nd Street for 41,300 square feet. The landlord is Vornado Realty Trust.
Retail:
  1. Lack of demand caused a 8.8% drop in asking retail rents in the fourth quarter of 2019 in Manhattan’s 16 biggest retail corridors.
  2. The 10 biggest retail leases totaled 290,200 square feet, up 120,500 square feet from last month’s total of 169,700 square feet.
  3. Best Buy signed a lease at 535 Fifth Avenue for 40,839 square feet. The landlord is the Moinian Group.
  4. Citizens signed a lease at 5 Manhattan West for 40,000 square feet. The landlord is Brookfield Property Partners.
  5. RAD Entertainment Group signed a 20 year lease at 1515 Broadway for 39,436 square feet. The landlord is SL Green Realty.
  6. Target signed a lease at 3-50 Saint Nicholas Avenue for 33,000 square feet. The landlord is AB Capstone.
  7. Target signed a lease at 233 West 42nd Street for 32,942 square feet. The landlord is Tishman Speyer.
  8. M&M’s World signed a lease at 1600 Broadway for 30,000 square feet. The landlord is Sherwood Equities.
  9. Olive Garden signed a lease at 2 Times Square for 20,000 square feet. The landlord is Sherwood Equities.
  10. Yard House signed a lease at 10 Times Square for 19,000 square feet. The landlord is L.H. Charney Associates.
  11. Riad Nasr & Lee Hanson signed a lease at 45 Rockefeller Plaza for 18,000 square feet. The landlord is Tishman Speyer.
  12. Trader Joe’s signed a lease at 22-43 Jackson Avenue, Long Island City for 17,000 square feet. The building is being developed by Circle F Capital.
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