market research

November 2019

November 2019 New York Commercial Real Estate Market Report

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Office:
Wework emergency rescue by Softbank stole the headlines as many landlords are now preparing plan B with Wework being the largest private office Tenant in New York City. Otherwise, leasing was quiet.

Retail:
Restaurants and gyms continue to be the largest consumer of retail. Forever 21 bankruptcy proceeding is only going to add to the retail vacancy inventory.

Building Sales:
Building sales are at a 2 year low of 995 million in sales last month.

New York Market Overview

Office leasing volume from the top 10 leases was 820,500 square feet. With half of them coming from WeWork, who will be out of the market for a while if at all. Other big tenants include law firms, branding agencies and Knotel.

Manhattan Retail:

Retail leasing for gyms and restaurants were among the largest deals. The top was Ikea’s first Queens location.

Manhattan Sales:

Manhattan investment sales hit a two-year low with $995 million in deals recorded, 52% down from June and 59% below the 12-month average. The borough’s largest deal was Savanna’s $180 million buy of 360 Lexington Avenue from AEW Capital Management.

Manhattan Leasing:

The top 10 office leases totaled 820,500 almost double of the previous month’s total of 464,100 and is also down year over last year in 2018 totaled about 1.1 million square feet.

  1. WeWork signed a lease for space at 437 Madison Avenue for 362,197 square. The landlord is the William Kaufman Organization.
  2. Kelley Drye & Warren inked a 15-year lease at 3 World Trade Center for 103,000 square feet. The landlord is Silverstein Properties.
  3. Davis & Gilbert LLP signed a lease for space at 1675 Broadway for 86,000 square feet. The landlord is the Rudin family.
  4. Global Infrastructure Partners renewed and expanded its lease at 1345 Sixth Avenue for 84,653 square feet. The landlord is Fisher Brothers.
  5. Thelab signed a 15 year lease for space at 175 Pearl Street, Dumbo for 42,452 RSF. The landlord is Normandy Real Estate Partners.
  6. General Atlantic Service Company expanded its lease at 55 East 52nd Street with 31,202 square feet making its total presence in the building to over 90,000 square feet. The landlord is the Fisher Brothers.
  7. Aetion inked a 10-year lease at 5 Penn Plaza for 29,000 square feet. The landlord is Haymes Investment Company.
  8. Marquee Brands inked a lease at 330 West 34th Street for 27,811 square feet. The landlord is Vornado Realty Trust.
  9. Knotel inked a lease at 240 West 35th Street for 27,186 square feet. The landlord is ATCO Properties & Management.
  10. MWWPR inked a 15-year lease at 1250 Broadway for 27,040 square feet. The landlord is Global Holdings Management Group.
Midtown office leasing was 780,000 square feet, down 28% from the month before and down 30% year-over-year. The availability rate rose half a percentage point to 11.1%, due to new construction. The average asking rent climbed to $87.42.

Leasing activity in Midtown South returned to normal after last month’s Google-driven spike with 330,000 square feet, an 82% drop from a month before and down 49% year-over-year. The availability rate dipped to 9.3%, while the average asking rents continued to fall at $85.70 per square foot.

Lower Manhattan office leasing was slow with 260,000 square feet, down 60% from the month before but still 8% up year-over-year. The availability rate dropped slightly to 12.3% and the average asking rent rising slightly to $63.36 per square foot.

Retail:

The 10 biggest retail leases made public totaled 187,900 square feet, down 35% from last month’s total of 291,100 square feet but still up from September 2018.

  1. Ikea signed a 10-year lease at 61-35 Junction Boulevard for 115,000 square feet. The landlord is Vornado Realty Trust.
  2. First Republic Bank inked a lease on the first and second floors of 1 Grand Central Place for 14,430 square feet. The landlord is Empire State Realty Trust.
  3. Sophie’s Cuban Cuisine inked a lease at 630 Flushing Avenue, Bedford-Stuyvesant for 11,136 square feet. The landlord is Acumen Capital Partners.
  4. Metro Rock Climbing inked a lease at 263 South 5th Street in Williamsburg for 10,000 square feet. The landlord is Ripco Real Estate.
  5. Buy Buy Baby inked a lease at 2175 Broadway for 9,685 square feet. The landlord is Lophijo Realty.
  6. Inked signed a 10-year lease at 150 West 22nd Street for 8,500 square feet. The landlord is Redwood Property Group.
  7. Hopscotch Montessori School inked a 20-year lease at 624 West 57th Street for 6,855 square feet. The landlord is the Durst Organization.
  8. Sephora inked a lease at 139 Flatbush Avenue in Brooklyn for 5,500 square feet. The landlord is Madison International Realty.
  9. John Wintermen & Chef Chris Cipollone signed a lease at 134 Broadway in Williamsburg for 3,625 square feet. The landlord is Caspi Development.
  10. Orangetheory inked a 10-year lease at 133-15 39th Avenue in Flushing for 3,200 square feet. The landlords are F&T Group and SCG America.
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