New York Market Overview
Retail:
In January 2020, Fendi and Berluti inked leases at 595 Madison Avenue after Coach left. Hermes, Giorgio Armani and Brunello Cucinelli are also planting a flag in or increasing their footprints in the area.Toys ‘R’ Us is planning a large-scale comeback with the help of retailer Macy’s. Toys ‘R’ Us is set to bring more than 400 shops within Macy’s department stores, across the country, starting next year.
Madison Avenue retail from 57th Street to 72nd Street is only seeing 71% of its 2019-foot traffic.
Upper Fifth Avenue is at 92% of its 2019 levels. Soho foot traffic is 110% of its 2019 levels.
Madison Avenue has an availability rate of 39%, the highest in Manhattan. In November, the area’s Business Improvement District created a template for short-time licenses in an attempt to boost leasing activity.
A judge has ordered the Gap and its Old Navy subsidiary to pay millions of dollars in back rent at its Times Square flagship.
Restaurants, bars, and hotels powered private-sector job gains for a second straight month, calling back 327,000 workers in July, more than any other non-governmental sector. The leisure and hospitality industry accounted for 54% of all private-sector job growth last month, adding 380,000 jobs to the economy.
Office:
July’s leasing volume of 2.35 million square feet was well above last year’s monthly average of 1.58 million square feet. It was still nearly 35% below 2019 levels, when the pre-pandemic market averaged 3.58 million square feet per month.Sublease availability climbed, reversing the downward trend seen in the prior three months. Net sublet availability in July rose by 360,000 square feet to 21.61 million, the highest amount since the start of the pandemic.
July’s sublet inventory is 1.8 times more than the amount seen in March 2020, when inventory sat at 11.9 million square feet.
The Downtown submarket has set a new record-high for availability at 18.3%, with more than 100,000 square feet added to the market at 88 Pine Street and 81,000 square feet at 110 William Street.
The Midtown office market had close to 20% of all Midtown office space available in the second quarter. Meanwhile, sublease vacant space increased by 14.7% to an all-time high of 12.6 million square feet.
Boston Properties has felt the effects of the Delta variant firsthand. The company owns around 12 million square feet of space in the city and Its buildings had returned to about 40% of their pre-pandemic occupancy by the beginning of the summer, but that figure has since been reduced to about 30%.
The larger office market is struggling as companies push back returns to the office due to concerns about the variant. Major office holders such as Facebook, BlackRock and Wells Fargo have now delayed office returns to January.
Chubb Group is in negotiations for 250,000 square feet at 550 Madison Avenue. The insurance firm could possibly become the first tenant there following a $300 million renovation.
The U.S. General Services Administration awarded WeWork a $10 million contract to provide office space for its workers. This is the first time the government has looked for coworking space.
Advance Publications have agreed to pay almost $10 million in back rent owed to co-developers the Durst Organization and the Port Authority.
Stone Ridge Asset Management signed a lease at One Vanderbilt for 100,000-square-foot at rents rising to $245 per square foot over 15 years at the tower. The company will move from 560 Madison Avenue.
State Street Corp. is planning to sublease its offices at 1040 Avenue of the Americas and the 10th floor of 1290 Avenue of the Americas as the company has adopted a hybrid work plan where workers have the option of working remotely or its other office spaces in Connecticut or New Jersey.
Hudson’s Bay Company is converting some of its Saks department store space into co-working locations to be operated by WeWork. Hudson’s Bay plans to open five co-working spaces in New York next month.
IWG is adding two more coworking locations to its New York City portfolio. IWG has reached agreements to take up coworking space for 63,000 RSF at 401 Park Avenue South operated as Spaces and 28,000 RSF at 14 Penn Plaza operated as a Regus.
