New York Market OverviewMarket Overview:
Midtown office leasing continued to slow, totaling just under 1 million square feet, down 21% from the month before and 26% year-over-year. The availability rate stayed flat at 10.6% while average asking rent rose to $88.20.
Leasing activity in Midtown South slowed with 610,000 square feet in leases signed, a 20% decline from last month. The availability rate ticked down to 10%, and the average asking rent fell to $83.12 per square foot.
Lower Manhattan office leasing jumped to 890,000 square feet, nearly double the month prior, making the first half of 2019 the submarket’s strongest half-year since 2000. The availability rate fell to 13%, and the average asking rent rose further to $63.13 per square foot.
It’s been a good month for the office leasing scene with about 2.9 million square feet of space leased. Almost half of that total is made up of Google’s Hudson Square campus lease. Other big tenants include media groups and online retailers.
The top office leases add up to more than double the square footage of the month prior. Last month’s top ten office leasing deals totaled 1.2 million square feet, 1.7 million square feet less than this month’s total of 2.9 million. The total is also a step up from July of last year. The top ten office leasing deals of July, 2018 totaled about 1.7 million square feet.
- Google finalized its lease for 1.3 million square feet of space at 550 Washington Street. Oxford Properties Group is the landlord.
- Publicis Groupe renewed and expanded its 20-year lease for 960,000 square feet of space at 375 Hudson Street. Publicis is planning to relocate all of its agencies from 1675 Broadway. Landlord is Trinity Church.
- District Council 37 inked a temporary sublease for 130,000 square feet of space at 55 Water Street while its main headquarters at 125 Barclay Street are being renovated. The sublandlord is Liberty Mutual.
- WPIX renewed its lease for 101,568 square feet of space at 220 East 42nd Street. SL Green Realty is looking to sell the building, which could trade in the area of $1 billion. SL Green is the landlord.
- Moda Operandi signed a lease for 83,685 square feet of space at 195 Broadway, relocating from 315 Hudson Street. The landlord is L&L Holding Company.
- Moet Hennessy USA leased 82,000 square feet of space at 7 World Trade Center. Silverstein Properties is the landlord.
- Oscar Health expanded by 80,000 square feet of space at One Hudson Square, doubling its total presence at the building to 160,000 square feet. The landlord is Trinity Real Estate.
- Consulate General of Japan renewed its 17-year lease for 58,244 square feet of space at 299 Park Avenue. Fisher Brothers is the landlord.
- Maquette inked a lease for 46,860 square feet of space at 48-49 35th Street, . North River is the landlord.
- Avison Young signed a lease for 45,000 square feet of space at 530 Fifth Avenue. RXR Realty is the landlord.
The New York metro market has led U.S. in hotel construction for the last four or five years, accounting for about 10% of hotel construction activity for the country as a whole.
Building Sales:In the first half of the year, there was some hesitancy from buyers and sellers leading to a slowdown in U.S. commercial deal volume. It has started to pick up again due to cheap credit and falling interest rates.
Manhattan investment sales stayed flat with $3.49 billion in deals recorded, 35% above the 12-month average. The strong showing was largely due to one deal, which saw the Related Companies and Allianz buy the 1.5 million square-foot office condominium at 30 Hudson Yards for $2.2 billion.
It was a good month for New York City’s restaurant scene with food halls, dumpling houses and ramen shops. However, the largest lease was inked by a movie theater.
Retail rent decreases 26% on Madison Avenue and 11% on the Upper West Side over the past year. Average rent in Manhattan had risen by 44% to $156 per square foot between 2006 and 2016.
The 10 biggest retail leases totaled 177,600 square feet, up 13,000 square feet from last month’s total of 164,600 square feet. 5,700 square feet fewer than last month’s total.
- AMC Theatres renewed its 15-year lease for 95,341 square feet of space at 312 West 34th Street. The building’s landlord is SL Green Realty.
- KFF food hall signed a multilevel lease for 22,927 square feet of space at 218 West 40th Street. The landlord is 218 West 40th Associates.
- Ulta Beauty inked a lease for a 12,040 square-foot flagship store at 2 Herald Square. The space was formerly occupied by H&M. The landlord is SL Green Realty.
- Magic Moments Academy signed a lease for 11,500 square feet of former co-working space at 639 Classon Avenue. The landlord is Green Pacific Realty.
- Wonder World NYC inked a lease for 8,000 square feet of space at 61 North 9th Street. The landlord is 61 North 9th LLC.
- Venn City signed a lease for 7,975 square feet of space at 10-22 Wyckoff Avenue. The landlord is 10-22 Wyckoff LLC.
- Brunello Cucinelli inked a lease for 6,100 square feet of space at 50 Gansevoort Street. The landlords are Aurora Capital and William E. Gottlieb Real Estate.
- Nan Xiang Xiao Long Bao signed a 10-year lease for 5,113 square feet of space at One Fulton Square. The landlord is F&T Group.
- Calle Ocho signed a lease for 4,400 square feet of space at 2756 Broadway. The landlord is Michael Rose.
- Momosan Ramen & Sake signed a 10-year lease for 4,173 square feet of space at 76 Saint Marks Avenue.
- The landlord is RedSky Capital.