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New York Real Estate News Archive 2006 News December 2006

December 2006: Manhattan Retail, Office and Industrial Market Report

New York Market Overview

The New York City office market continues to tighten. Landlords are not being bashful about raising office rents. Office rents are up 20% to 40% over the past 18 months. The higher office rents are fuelling higher asking prices for office buildings.

Buyers with large amounts of cash to invest are looking to buy many office buildings as efficiently as possible, hence the bids by investment groups to buy Reckson and Equity Office.

The Blackstone Group, bid $20 billion for Equity Office plus the assumption of existing $16 billion debt, the total transaction is valued at approximately $36 billion. Equity Office has an office portfolio consisting of whole or partial interests in 580 buildings comprising 108.6 million square feet.

Mack-Cali Realty Corp. Carl Icahn and Harry Macklowe have bid to $4.6 billion in cash, or $49 per share buy Reckson Associates Realty Corp. Reckson owns 101 properties in New York, and in New Jersey. Reckson-s board had already approved a binding offer to be bought by SL Green Realty Corp. for stock and cash worth about $3.98 billion, or $45.73 per share. Either bidder must assume $2 billion of Reckson-s debt.

Manhattan Office Space Rentals:
  • Total New York City Office Class A vacancies dropped from 14.58 million RSF to 14.23 million RSF as total vacancy dropped from 24.28 million RSF to 23.69 million RSF.
  • Total New York City Office direct lease vacancy dropped from 20.57 million RSF to 19.98 million RSF, as sublease vacancy stayed at 3.72 million RSF.
  • Total New York City Office Market vacancies dropped from 24.28 million RSF to 23.69 million RSF.
  • Midtown South Office vacancy dropped from 4.36 million RSF to 4.30 million RSF.
  • Total Midtown Office vacancy dropped from 12.01 million RSF to 11.80 million RSF.
  • Total New York City Downtown vacancy dropped from 7.91 million RSF to 7.59 million RSF.
  • Total vacant Office Space in Midtown New York City in sublease space rose from 2.09 to 2.212 million RSF.
  • Total vacant direct space dropped from 9.93 million RSF to 9.59 million RSF.
  • Midtown South Office direct lease vacancy rose from 3.79 million RSF to 3.80 million RSF.
  • Sublease vacancies dropped from 0.56 to 0.50 million RSF.
  • Total Downtown New York City Office vacancies dropped with direct lease space decreasing from 6.84 million to 6.59 million RSF.
  • Total vacant sublease space continues to decrease from 1.07 to 0.99 million RSF.


New York City Retail Leases:
  • Total available New York City Retail Space rose from 0.74 to 0.77 million RSF.
  • Midtown South Retail space vacancies rose from 0.41 to 0.46 million RSF.
  • Midtown vacancy dropped from 0.18 million RSF to 0.17 million RSF.
  • In Downtown, retail vacancy dropped from 0.15 million RSF to 0.14 million RSF.


New York City Industrial Leases:


Legend

RSF-Rentable Square Feet
SF- Square Feet


rent retail manhattan Graphs and Statistics

 

Manhattan Office Leases:
  • Department of Transportation leased 429,000 SF at 55 Water Street.
  • Dechert LLP leased 234,238 SF at 1095 Sixth Avenue.
  • Barclays Capital leased 150,000 SF at 200 Park Avenue.
  • Harris Beach leased 46,171 SF at 100 Wall Street.
  • The Doneger Group leased 44,001 SF at 463 Seventh Avenue.
  • Novantas LLC leased 41,147 SF at 485 Lexington Avenue.
  • OfficeLinks leased 27,815 SF at 40 Wall Street.
  • Tourneau Inc. leased 27,250 SF at 31-00 47th Avenue in Long Island City.
  • OfficeLinks leased 20,854 SF at 1440 Broadway.
  • Bollinger Inc. leased 18,426 SF at 100 Wall Street.
  • The Readers Digest Association leased 18,128 SF at 16 East 34th Street.
  • Mergermarket leased 14,000 SF at 895 Broadway.
  • Global Realty Outsourcing Inc. leased 13,827 SF at 485 Lexington Avenue.


New York City Buildings Sold :
  • MetLife, Inc. closed on the sale of Peter Cooper Village and Stuyvesant Town properties to a group led by Tishman Speyer and BlackRock Realty for $5.4 billion.
  • 425 Park Avenue, a 600,000 SF office tower, was sold to L& L Holding Co. for $1 billion.
  • Vornado Realty Trust is in contract to buy the New York City Mall, a mixed-use, 1.1 million-square-foot building on Sixth Ave., between 32nd and 33rd streets for $689 million. There are 250,000 square feet of air rights, included in the deal.
  • The Witkoff Group is in contract to buy 1745 Broadway a 675,000-square-foot office for $509 million, or roughly $754 per square foot.
  • 2 Park Avenue, a 960,000 SF office tower, was sold to L & L Holding Co., General Electric Pension Trust, for $450 million or $468/RSF.
  • 717 Fifth Avenue, a retail condo, was sold to Jeff Sutton for $200 million.
  • Larry Silverstein and CalSTRS JV are in contract to buy 99 Church Street a 336,000-square-foot, Class B office building for $170 million.
  • 485 Fifth Avenue, a mixed-use condominium property, was sold to Global Hyatt Corp. for $136 million.
  • 443-453 Greenwich Street, a two 7-story office building, 217,549 sf total, was sold for Shahab Karmely for $115 million.
  • 750 Columbus Avenue (Key West), a 13-story, 207-unit apartment building, was sold for $110 million, $531,000 per unit.
  • Brooklyn portfolio of 10 apartment buildings, 780 units total was sold to Urban American for $64.7 million.
  • 39 East 29th Street, a vacant lot, was sold to Espais Promocions, Immobiliaaries, Landscape Promocions Immobiliaries for $56 million.
  • 105-07 West 57th Street, a Development site, was sold to Starwood Capital Group for $52 million.
  • 15 Gold Street, the Wall Street Holiday Inn, was sold to LaSalle Hotel properties for $51 million.
  • Brooklyn properties and Bronx properties, comprising of 11 apartment buildings, was sold to The Praedium Group for $47 million.
  • 511-521 Ninth Avenue, a 130,000 SF parking lot, was sold to Morris Harary for $37 million.
  • A portfolio of 11 apartment buildings at West 111th, 112th , 3 buildings on 8th Avenue and 3 buildings on West 149th street was sold for $25 million.
  • 2400 Nostrand Avenue in Brooklyn, a 6-story, 133 – unit apartment building, was sold to Weiner Realtors for $13 million.
  • 115 MacDougal Street, a 3-story, 12,080 SF building was sold to a Long Island investor for $6.8 million.
  • 522 Ninth Avenue, a 4-story mixed-use building, was sold for $3.1 million.
  • 449 West 46th Street, a 5-story, 7,200 SF apartment building, was sold to a New York City investor for $3.7 million.
  • 2954 Valentine Avenue in the Bronx, an 8-story, 42- unit apartment building, was sold for $2 million.