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Slow February office leasing in Manhattan as vacancies rise to all time highs.


Luxury Retailers are buying their locations on Fifth Avenue in the Plaza district at premium prices.


Smaller buildings are being sold by motivated sellers. Large office landlords with substantial vacancies are hoping to surrender their buildings to the bank.

New York Market Overview


Office values are down 25% year-over-year through December. With the rise of remote working and other economic conditions, there’s no guarantee those values will ever reach previous levels again.

Office owners are showing more willingness to sell properties at a discount. As declining occupancy rates and higher interest rates have driven down values on buildings, some of which were bought at previous market cycle peaks.

High interest rates have discouraged dealmakers, while office values have fallen by billions (maybe trillions) of dollars thanks to remote work. Peel back a few layers and things might not be quite so dire, but they’re still far from ideal.

Just days after it reached an agreement to stay at two New York offices, WeWork has added nine more leases to the reject pile. Three of those offices are in New York City: 75 Rockefeller Plaza, 214 West 29th Street and 115 West 18th Street.

Intercontinental Exchange signed a lease for 143,000 square feet at 1345 Sixth Avenue and will occupy floors five through eight of the 50-story office tower. The asking rent on the 15-year lease was in the low $80’s per square foot.

Ralph Lauren reduced its office space plus got 30% on its previous rent at 650 Madison.

Sol de Janeiro USA is renting 57,000 square feet at 60 East 42nd Street for 11-years.

Selfhelp Community Services is leasing 46,000 square feet on the second and third floors at 1180 Sixth Avenue with a 30 year lease. Selfhelp was able to apply for a property tax exemption available to nonprofit tenants that sign leases of 30-plus years.

Facebook’s parent Meta is further shrinking its New York City office footprint and will likely not renew its lease for 275,000 square feet at 770 Broadway which expires in June.

Barings entered into a $160 million contract for the Midtown office building at 1370 Sixth Avenue for about 25% off the $217 million seller Principal Real Estate Advisors paid in 2005.

The Metropolitan Transportation Authority’s revenue from real estate taxes fell by almost half last year. It collected $741 million from those taxes last year, down from $1.4 billion in 2022, a 41% drop. MTA officials attributed the decline to the fall in commercial sales and mortgage activity. The MTA had anticipated a drop of at least $600 million in tax revenue, so it built all but $16 million of the drop into its budget. State lawmakers made up for the expected shortfall by passing a rescue package in early 2023 and bumping up fares. Without that money, the agency would have had to slash services. Instead, it ended last year with balanced books, and should stay in the black for the next five years.

Industrial giant Prologis has scooped up a 16-acre undeveloped parcel in Brooklyn. The San Francisco-based real estate investment trust bought the lot at 2731 West 12th Street from National Grid for $51 million. Prologis plans to use the land for a parking lot for delivery vans, small trucks and cars. The parcel sits in an Opportunity Zone, a program which encourages investment in low-income areas by providing tax incentives, although the Prologis parking lot does not figure to do much for Coney Island’s economy. The site also qualifies for a tax abatement under the Industrial and Commercial Abatement Program.

One of the unexpected casualties of New York’s frozen commercial sales market is the city’s transportation system. In 2022, the agency claimed to have lost $690 million in toll and fare revenue, as MTA riders and drivers evaded paying their share. Over the summer, the fare to take the subway in New York City rose from $2.75 to $2.90. Additionally, the MTA has been rolling out fare gates to try and stop evaders from hopping the turnstiles.

Thor Equities has scored a new tenant at the former home of the 9/11 Tribute Center. The Pilecki Institute, a Polish research and cultural organization, signed a 15-year lease for 35,000 square feet in the retail condo at 88 Greenwich Street. The asking rent was $60 per square foot. The retail condo is in the Greenwich Club Residences, a 37-story building with 452 units. Sitt joined with Andrew Heiberger’s Buttonwood Development to buy the building in 2005 for around $200 million and converted it into condos.

Rocky road for New York Community Bank, company cuts dividend. In fact, in terms of multifamily loan originations, the regional bank had a no-so-great year. The bank acknowledged a 90% decrease in multifamily loan originations in 2023 during its fourth-quarter earnings. The bank’s stock plummeted to $5.96 per share when the market opened, bringing it to a 23-year low. The share price recovered a bit to $6.47 but still finished the day down 38%. The company is cutting its dividend by 70% to five cents per share.

Office leasing activity plummeted for the month, thanks to lagging demand with office availability at an all-time high for the second straight month.

Total activity for the month ended at 2.25 million square feet, barely half the volume from last January, and a fall of almost 40% from December.

The office market has been at a stand still where availability has remained at 17.9% for two months. Even in the busiest of months, the amount of office space coming onto the market has often outstripped leasing volume.

Leasing volume fell below the five-year monthly average of 2.35 million square feet. January often brings a drop in leasing after tenants rush to sign leases in December.

The fourth quarter of 2023 was the strongest period since mid-2022, paving the way for the slow start to this year.

One or two megaleases can make all the difference between a lackluster month and a solid one. But January saw no such megaleases, and only four leases over 100,000 square feet.

The sublet market stayed busy with large blocks of space hitting the market and leaving it. Still, most of the damage done was recovered, as sublet space was either leased or taken off the market. Altogether, available sublet space increased by just 47,000 square feet for the month, and has actually decreased throughout the borough by 1.4% over the last year.

Office leasing continues to be a fractured market across Manhattan, with each neighborhood facing different demands.

Leasing in Midtown fell by almost half from December, at 1.34 million square feet leased. But that was enough to outdo its monthly average for the last five years.

Midtown South had its worst leasing total in six months at 0.53 million square feet, while Downtown saw a modest decline from December to 0.39 million square feet.

Even within each neighborhood, demand can vary vastly from one avenue to the next. In Midtown, the average availability on both Sixth Avenue and Park Avenue sits around 11 to 12%. Third Avenue is closer to 20%, though that’s a stark improvement from the 25% availability rate in early 2023.

Typically, 10% availability is a healthy equilibrium for a market.

Asking rents ticked downward by a few cents for the month, to $74.64 per square foot annually, as the highest quality, most expensive space becomes harder to come by.


Arc’teryx signed a lease for nearly 13,000 square feet at 600 Fifth Avenue in Midtown, Manhattan.

The Westfield Corporation wants to terminate its Fulton Center lease early, a decision the New York City Transit Authority will not like. The NYCTA filed a lawsuit to block the subsidiary of Unibail-Rodamco-Westfield from terminating its lease.

Rooftop Hospitality Group leased 15,000 square feet at GFP Real Estate’s 520 Eighth Avenue with a 20-year lease.

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