New York City office
and retail Market Research

March 2022

March 2022 New York Commercial Real Estate Market Report

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Office:
Manhattan’s office market hit a vacancy rate of 17.3% at the end of 2021, up by one-fifth from 2020. Leasing activity accelerated during the year, rising 60% in the third quarter and finishing the year at more than twice the pace of 2020’s fourth quarter.

Retail:
Retailers on Fifth Avenue and Times Square have just begun to look for new locations.

Sales:
A preliminary NYC budget shows office properties have lost 7% of their value in the last two years, dropping from $172 billion to $160 billion. Retail properties have declined 11.9%, from $63.8 billion to $56.2 billion. $136 billion was spent on office portfolios and properties last year, compared to $87 billion in 2020. Commercial real estate investors spent $49 billion in New York.

Hotels estimated value declined 19.6%, from $32.7 billion to $26.3 billion.

New York Market Overview

Office:

Tech companies leased 76% more space year-over-year in the last three quarters of 2021.

Santander Bank is relocating its headquarters to WeWork and subletting 160,000 square feet at 437 Madison Avenue.

Hermès inked a lease at 550 Madison Avenue. The brand signed a three-floor, 71,757-square-foot lease relocating from 55 East 59th Street.

Mutual of America Financial Group signed a lease for 252,000 square feet it already occupies. A year before the company brought in a joint venture partner to co-own the 766,000-square-foot property.

First Service Residential took 48,000 square feet at the Midtown building across the ninth and 10th floors at 575 Fifth Avenue.

32 West 39th Street, an 87,000-square-foot office building, constructed in 1925 is going Condo with floors ranging from 3,970 to 8,371 square feet. Offices can also be combined to create a 70,000 square feet.

Top Tenants at 26 Broadway

# Tenant Square Feet % Sq Ft Base Rent psf ($) % Base Rent Expiry
1 NYC Dept. of Education Construction Authority 288,090 34.3 40.73 39.0 2041
2 Live Primary 73,565 8.8 33.00 8.1 2027
3 New York Film Academy 43,865 5.2 42.52 6.2 2030
4 New York State Court of Claims 43,769 5.2 46.64 6.8 2031
5 Jigsaw Productions 29,590 3.5 46.92 4.6 2027
6 Schlam, Stone & Dolan LLP 18,085 2.2 41.95 2.5 2029
7 Mobo Systems Inc 14,740 1.8 51.44 2.5 2023
8 Sloss Eckhouse Dasti Haybes LawCo. LLP and Cinetic Media 17,712 2.1 42.00 2.5 2031
9 The Lang School 17,317 2.1 32.78 1.9 2026
10 New York International Creative Center Co. 11,500 1.4 85.65 3.3 2031
Top Tenants 558,233 66.6 41.70 77.4
Other Tenants 132,232 15.7 51.65 22.7


The building is 82.2% leased to 44 tenants. Primary, a flex office provider co-founded by early WeWork employee Lisa Skye, the second-largest tenant after the School Construction Authority. It will pay reduced rent through 2023 following its emergence from bankruptcy.

Code Climate is taking approximately 42,000 square feet at 195 Broadway, the asking rent was $55.

One World Trade Center signed three new tenants at its building, filling an additional 73,000 square feet of space and bringing the Downtown building’s occupancy rate up to 92%.

Retail:

Landlords are filling more vacant retail spaces with medical tenants such as doctors and dentists. The rise of “medtail” comes as tenants take advantage of lower rents. 20% of leased medical space is located in retail buildings, up from 16% in 2010.

Petco is leasing 30,000 square feet at Union Square and will occupy three of seven floors in the 73,000-square-foot building .

Earl Enterprises (Planet Hollywood) signed a lease for 17,500 square feet across four floors at 140 West 42nd Street.

BFC’s Empire Outlets on Staten Island entered foreclosure which will allow the restructuring of debt on the $350 million shopping center and will cost BFC its ownership of the project. Shoppers at the 340,000-square-foot mall won’t notice immediate changes and the mall will remain open. A dozen retail tenants abandoned 50K sf during the pandemic.

Versace is replacing Givenchy at 747 Madison. The retailer agreed to a 15-year lease near a reported $1,700 per square foot, set to stay in the space until 2029. The company is starting at $1.6 million per year, The lease at the corner of East 65th Street includes 2,800 square feet on the ground floor, a 1,000-square-foot mezzanine and a 1,500-square-foot basement.

The Paramount Group announced a 15-year-lease at 1633 Broadway for Din Tai Fung, which has earned a Michelin Star rating and international reputation for Chinese steamed soup dumplings. Rents for the 26,400-square-foot space were not revealed.

New York City’s hotel industry averaged a 56.5% occupancy rate in February, but are still trailing levels typical before the pandemic and in the holiday season before the surge of the Omicron coronavirus variant. February marked a significant step up from the previous month. As the Omicron variant’s spread, the city’s occupancy rate dipped as low as 40.3% in early January.

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