New York City office
and retail Market Research

September 2022

September 2022 New York Commercial Real Estate Market Report

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Office:
Office occupancy has been stuck at the 40% mark. Major tech companies have announced they are pulling back on plans to expand. Some are putting up space for sublease, demonstrating the sticking power of work-from-home arrangements.

Retail:
The top 10 retail leases accounted for more than 175,000 square feet.

Manhattan retail leasing saw a 23% increase year-over-year. Fashion brands and global food chains cashed in on the opportunity to occupy Manhattan’s retail space.

Building Sales:
Building sales are expected to decline due to higher interest rates, as buyers wait for lower pricing and lenders cease activity.

Investment sales in the first half reached a total volume of $21.6 billion. Volume slowed slightly in the second quarter, though, there was $9.8 billion transacted.

There were 554 transactions in the second quarter, involving 719 properties. Core property types averaged $582 per square foot in the trades, down from $604 per square foot in the first quarter.

New York Market Overview

Retail:

Bed Bath & Beyond is closing hundreds of stores and laying off a large percentage of its workforce. About 150 of its lower-performing stores would be closed in the near future, marking a footprint reduction of about 16% of its 955 stores.

Free People, an Urban Outfitters subsidiary, is responsible for more than $13 million in back and future rent at 58-60 Ninth Avenue.

Mayor Eric Adams announced a crackdown on abandoned dining sheds. The mayor believes that sheds are dangerous or a haven for rats, and he wants to root out those who use the sheds for illegal behavior.

The Zar family secured $100 million to refinance a pair of Safra National Bank provided the financing to Zar Property NY on 42 Greene Street and 90 Grand Street.

The multifamily market led the way: elevator property deals rose 373.1%, while walk-up property deals increased 114.1%. Other property types to see a big increase in deal volume were offices (168.1%), industrial (83.8%) and retail (57.7%).

A seven-story structure at 132 West 14th Street will be converted into a modern Class A office and retail building, with ceiling height at the top two floors at 15 feet and a roof deck. Asking rents are expected to be north of $90 per square foot.

The Chetrit Group secured a $185 million construction loan from Mack Real Estate Credit Strategies for the 570-key Hotel Carter at 250 West 43rd Street. There will be a complete gut renovation while turning the property into a modern hotel.

Office:

Manhattan office leasing totaled 11.6 million square feet in the first half of the year. That was up 83% from a year earlier, but 3% below the five-year average.

Lower Manhattan office vacancies rose for nine straight quarters to a record 20.1% in the second quarter.

The average price-per-square-foot of office space in Midtown, Midtown South and Downtown was $79.85, $81.05 and $59.46, respectively.

Midtown saw a particular surge with nearly 2 million square feet of office space leased last month, a three-fold increase from July 2021 and more than in any month since December 2018.

Meta and Amazon have reeled back plans for offices in the city. Twitter is also beginning to cut back on physical office space. BuzzFeed is giving up around half of its footprint to relocate to 229 West 43rd Street going from 110,000 square feet to 60,000 square feet.

Edelman is renewing its 173,000-square-foot office space at 250 Hudson Street.

Rideshare company Lyft is moving to reduce its office footprint at its four corporate offices across the country. Lyft is looking to sublease about 44% of its office footprint to other businesses. The four offices combine for 615,000 square feet.

Peloton is looking to sublease 100,000 square feet for sublease at Hudson Common. Peloton is the biggest tenant at the building, occupying 312,000 square feet.

Upscale free lunches are the latest perk being offered by companies to lure workers back to the office.

Tory Burch is renewing its 130,000-square-foot space for 13 years at 11 West 19th Street. The asking rent at the Flatiron District headquarters was $72 per square foot.

Capital One expanded to 117,000 square feet at 114 Fifth Avenue.

Verizon signed a 144,000-square-foot lease at 620 12th Avenue.

Life sciences rented a record 433,000 square feet last year in New York City.

Jay Conference signed a 40,000-square-foot lease at 104 West 40th Street.

400 Capital Management signed a lease at 660 Fifth Avenue for 25,000-square-foot on the 27th floor.

Ogden CAP Properties is renewing its lease at 545 Madison Avenue for a three-year term for 42,000 square feet. Asking rents at the building range from $84 to $101 per square foot.

Al Sharpton wants a new deal for his nonprofit, the National Action Network, at 106 West 145th Street in Harlem.

Spring Health has signed a lease for around 30,000 square feet at 60 Madison Avenue. The startup moved into a furnished 12,000 square feet on the 21st floor of 245 Fifth Avenue while its new space is being built out.

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