New York Market Overview

Office:

Tenants signed deals for 3.1 million square feet of office space, down about 7% since April, leasing volume was still up 5% year-over-year, thanks largely to NYU’s 1.1 million square foot lease at 770 Broadway, Manhattan’s largest new lease since 2019.

Leasing volume was still 16% above the 10-year monthly average, and demand exceeded supply. Availability tightened slightly, although the average asking rent was cut by 1.2%, the sharpest drop in three years to around $73.50 per square foot.

In Midtown, leasing volume shrank by 31% since April and 38% year-over-year. Availability tightened to its lowest since October 2020, a sign that supply could be hampering deals.

Manhattan sublet supply shrank for the eighth consecutive month to about 14 million square feet, the lowest since July 2020. Midtown South was the first neighborhood to see its sublet supply drop to pre-pandemic levels.

Office sublets have emerged as one of the winners in Trump’s trade war, as companies in need of office space look for cost-effective options that don’t require expensive build outs.

Sublets also offer a temporary solution for tenants to ride out the economic uncertainty, since lease terms are usually shorter than a direct lease. While some are opting to stay put in their current spaces, others are turning to sublets as a stopgap until things settle down.

The market with sublet supply are finally shrinking, thanks in part to return-to-office policies. Sublease deals have continued to accelerate since Trump’s chaotic tariff rollout. There were 17.4 million square feet of available sublet space in Manhattan at the end of 2024, which shrank to 14.9 million square feet as of May 1.

Tenants signed deals for about 1.2 million square feet of sublet space in the first quarter, compared to 729,000 square feet during the same period a year earlier. Those include Amazon’s 193,000-square-foot sublease at 237 Park Avenue, Mizuho Financial Group’s 151,000-square-foot sublease at 1285 Sixth Avenue and WeWork’s 112,000-square-foot sublease at 5 Manhattan West.

1. NYU leases 1.1 million RSF at 770 Broadway. NYU made an upfront rent payment to Vornado of $935 million and annual payments of about $9.3 million during the 70-year lease term. NYU has an option to purchase the office portion of the building at 770 Broadway in 2055 and at the end of the lease. It will assume the existing office leases and rental income at the property. Vornado will keep the 92,000-square-foot retail condominium currently occupied by Wegmans, which signed a long-term lease in 2021 for the space formerly occupied by K-Mart.
2. Durst is finally marketing the top floors of 1 WTC, asking $160 PSF for the 89th and 90th floors of One World Trade.
3. Pinterest Inc. is in talks for 80,000 RSF at 11 Madison Avenue.
4. Fox Rothschild's 73,000-square-foot renewal and expansion at 101 Park Avenue.
5. Aquarian Holdings signed a lease for 75,000 square feet at 550 Madison Avenue.
6. Bank of New York Mellon is in talks to sublease four floors from Condé.
7. Starr signed a lease for 49,000 square feet at 1177 Sixth Avenue. Asking rent was in the $80s per square foot.
8. PNC Bank is leasing 83,000 square feet at 437 Madison Avenue with a 15-year lease.
9. Chime leases 84,000 SF at 122 Fifth Avenue. The asking rent was $96.00 per square foot. Chime will be relocating from 101 Greenwich Street.
10. Fanatics signed a lease for 54,000 square feet at 345 Hudson Street.

Retail:

Old Navy inks year’s largest retail lease, breathes new life into stagnant Herald Square. They will open a 55,000-square-foot flagship on the first and second floors at 50 West 34th Street with a 15-year lease.

The converted co-op St. George Tower is adding a massive fitness center signed a 29-year lease for a 52,000-square-foot wellness facility in the residential building. The facility will occupy the ground floor and second level of the property at 111 Hicks Street.

Apparel signed a 25,000-square-foot lease at 480 Broadway, formerly occupied by TopShop.

Dozens of leases for New York City Rite Aid locations are expected to be auctioned off in July, 33 sites in the Big Apple, most of which are in Queens and Brooklyn, and 3 in Manhattan. The auction would likely happen in July. Rite Aid made virtually all of its real estate available after filing for Chapter 11 bankruptcy, a portfolio that includes 1,194 store leases and 50 company-owned properties across 15 states. There are 178 locations in New York; the 60-year-old pharmacy chain plans to close all locations after selling or rejecting its leases.

Rite Aid reported in an earlier court filing that 275 locations already have purchase agreements that are either in place or soon to be in place. Rite Aid, which operated 1,277 stores at the filing, had already closed approximately 800 locations during its previous bankruptcy and an additional 29 stores since emerging last September.