New York Market Overview
Manhattan office leasing in the second quarter of 2020 totalled just 3.18 million square feet, ½ the previous quarter and down 72% from the previous year and the slowest quarter for office leasing since 2009. Manhattan’s overall availability increased 0.4% points to 10.6%, the highest since early 2015. Manhattan’s asking rent average slightly decreased. Subleases have remained constant.Office leasing activity in April (1.35 million square feet) and May (1.42 million), in June, it was remaining at 410,000 square feet .
Midtown Office 1.88 million square feet in leasing activity in the quarter, down 52% year-over-year. The largest lease was TikTok’s 232,000-square-foot lease at 151 West 42nd Street .
Midtown South leasing activity declined 87% from the previous year to 640,000 square feet. The largest lease was Match Group, which signed a 41,000-square-foot lease at 60-74 Gansevoort Street.
Downtown the U.S. Securities and Exchange Commission rented 241,000 square feet at 100 Pearl Street, formerly 7 Hanover Square. Leasing activity in the submarket fell 73 % year-over-year to 660,000 square feet.
Work-from-home is predicted to create additional sublet space. That has yet to show up as Manhattan’s sublet availability rate went down to 2.2%.
Office:
Very few people have returned to their offices, despite it now being allowed. New York City entered Phase 2, allowing commercial office properties to operate at 50% capacity, outdoor dining to begin, barbershops to reopen and real estate agents to tour properties.It appears likely that a large portion of the workforce will continue to work from home well into the coming year. A recent poll found that companies expected just 10% of their employees to return to the office by August 15, and just 29% by year’s end.
Office workers will be returning to a new normal, with body temperature scans and socially distanced elevators. There’s a high degree of anxiety. Officing is going to be different than it was before.
Knotel missed two months of rent payments at 530 Broadway.
Allen & Overy and Japan’s Mitsubishi International renewed their office leases.
WeWork may exit or rethink 20% of its leases as they try to slash expenses and chase profitability. WeWork has 828 locations.
WeWork is pulling out of a lease for 115K S at 149 Madison Ave, potentially losing millions of dollars in the process. Columbia Property Trust is the landlord and had set aside almost $16M for a retrofit for WeWork.
Related and Oxford Properties are marketing Neiman’s 380,000 square feet at the top of the mall or roughly 40% of the shopping complex. Facebook is currently looking at the site.
Retail:
As many as 25,000 retail stores may close this year due to the coronavirus pandemic, with a majority closing in shopping malls, further hastening the industry’s decline.Neiman Marcus, JCPenney, J.Crew, and Victoria’s Secret have filed for bankruptcy.
The Mall of America has fallen behind on its $1.4 billion mortgage, exposing the wider bond market to systemic risk.
Men’s Wearhouse and Jos. A. Bank may soon join the growing list of retailers that have declared bankruptcy in recent months.
Target signed a 20-year lease with Vornado Realty Trust for the 55,614-square-foot retail condo at the base of 150 East 86th Street.
Target signed a 23,362-square-foot lease with the Chetrit Group at 795 Columbus Avenue near Columbus Circle.
