Optimal Spaces Inc. (lease office manhattan)
 
 
   
 
New York Real Estate News Archive 2006 News February 2006

February 2006: New York City Retail, Office and Industrial Market Report

New York City Office, Retail, Industrial Market Overview

Midtown New York City Office Space

For the first time in about 6 months, available office space in Midtown saw an increase, along with an increase in vacancy rates back above 6%. The strong demand and lack of new office buildings has led to rapid rent increases as prices finally catch up. This year, a record number of leases higher than $100 per square foot have been signed, led by Wachovia's expansion at the Seagram Building. High rents in general have become common in Midtown, with averages hovering around $50 for Class A space. This has finally caused a decrease in demand, as some tenants can no longer afford the area.

Downtown New York City Office Space

The exception is Downtown, where rents remain low, and government benefits are extended to encourage new tenants. Good space Downtown is still about half the price of comparable space in Midtown. Downtown vacancy rates continued to drop last month as savvy tenants take advantage of the rent gap. While the difference in vacancy rates is still dramatic (above 9% for Downtown, 6% for Midtown) tenants should continue to fill up Downtown spaces as long as the prices remain so low.

New York Outer Borough Markets

The tight Market in Midtown has pushed some tenants to attractive areas in the outer boroughs. In particular, a whole slew of developments are slated for Brooklyn in the next couple years. Bruce Ratner's office and retail complex surrounding the baskteball arena is the biggest, scheduled to bring in the New Jersey Nets for the 2008 season. Other developments include a $150 million waterfront park, a dock for the Queen Mary 2, the first IKEA store in New York, and the recent completion of expansion at the Brooklyn Bridge Marriott Hotel. Queens and the Bronx have not been left out, though. Both the Yankees and the Mets are building new stadiums together worth over $1.2 billion.

New York City Retail Leases:

  • Total available New York City Retail Space rose from 0.45 to 0.48 million RSF.
  • Midtown South Retail space vacancies held steady at 0.25 million RSF while in Midtown vacancy rose from 0.10 to 0.13 million RSF.
  • In Downtown, vacancy remained set at 0.10 million RSF.

New York City Industrial Leases :



New York City Real Estate Developments:
  • The Empire State Development Corp. approved plans to build a $150 million waterfront park underneath the Brooklyn Bridge, the first major park in Brooklyn since Prospect Park was built in 1870. The dock is expected to host the Queen Mary 2.
  • The New York Yankees and Mets have been approved to develop new $800 million and $444 million baseball stadiums.
  • The Marriott Residence Inn at 39th Street and 6th Avenue plans to convert 96 units on the top 10 floors to condos for long term stays, running from $650,000 to $950,000.
  • One of Times Square’s super-sign spaces is up for sale. At 3 Times Square, the Prudential Financial multicolor display, about 6,000 square feet over the 7th Avenue and 42nd street corner will come down soon.
  • The two story Automat Building at 104 West 57th street will be destroyed to make way for a new office tower.
  • A 35 Story, 250-unit building at 200 Little West Street in Battery Park city is under construction, slated for completion at the end of 2007.

Manhattan Office Space Rentals:

  • Total New York City Office Class A vacancies decreased from 16.89 million RSF to 16.83 million RSF, while total market vacancy increased from 27.98 million RSF to 28.20 million RSF.
  • Total New York City Office direct lease vacancy increased from 23.46 million RSF to 23.88 million RSF, while total sublease vacancy decreased from 4.52 million RSF to 4.31 million RSF.
  • Total New York City Office Market vacancies increased for the first time in several months as Midtown South Office vacancy rose from 4.05 to 4.29 million RSF and Midtown Office vacancy rose from 14.90 million to 14.95 million RSF. However, Total New York City Downtown Office vacancy rates decreased from 9.04 million RSF to 8.96 million RSF.
  • Total vacant Office Space in Midtown New York City increased led by a increase in total direct lease space from 12.45 to 12.79 million RSF. Total vacant sublease space decreased from 2.45 to 2.16 million RSF.
  • Midtown South Office direct lease vacancy increased from 3.65 million RSF to 3.86 million RSF, while sublease vacancies rose from 0.40 to 0.44 million RSF.
  • Total Downtown New York City Office vacancies decreased with direct lease space dropping from 7.36 million RSF to 7.24 million RSF, despite sublease vacancy increasing from 1.68 million RSF to 1.72 million RSF.


New York City Buildings Sold :
  • The Gershwin was sold to Archstone-Smith Trust for $342 million.
  • One Court Square, the 50-story Citibank Building, sold for $329.7 million.
  • 525 Lexington Avenue, Marriott East Side, sold for $287 million.
  • 620 Sixth Avenue, a seven-story, 670,000 sf building sold for $280 million.
  • 509, 535, and 545 Fifth Avenue, also known as the Zeus portfolio with 595,000 sf of office and retail space, was sold to Joseph Moinian for $260 million.
  • 1370 Sixth Avenue was sold to Principal Real Estate Investors for $217 million.
  • Delano Village in Harlem, a seven-building 1,800 unit portfolio, was sold to Apollo Real Estate Advisors and Neil Rubler for $175 million.
  • The Fortunoff Building on Fifth Avenue sold for $86 million.
  • 1075 Fifth Avenue, the Frawley Plaza between 110th and 111th streets was sold to Ruben Schron’s Cammeby’s International for $76 million.
  • 50 West 57th Street was sold to Vornado Realty Trust for $52 million.
  • Chrysler Building, a 20% ownership share sold for $45 million.
  • 110 East 55th Street, a 75,000 sf building, sold for $33.5 million.
  • 140 West 22nd Street, a 70,000 sf building, was sold to Cronus Capital for $27 million and is planned to be converted into a condos.
  • 1604 Broadway, a 41,000 sf retail building, sold for $21 million.
  • 379 West Broadway, a 62,006 sf office and retail building sold for $20 million.
  • 447-449 Fulton Street, and 497-501 Fulton Street sold for $12 million a piece.
  • 250 East 60th Street, a 4,000 sf building, sold for $11.75 million as a development site approved for 37,000 sf of development.
  • 184-188 Claremont Avenue, a 48 unit apartment building, sold for $10.25 million.
  • 521 Fifth Ave, a 1929-vintage tower on 43rd street, was sold to SL Green for an unspecified amount.
  • 110 Third Avenue, the old Variety Theater was sold and is set to become a 77-unit condo.

Legend

RSF-Rentable Square Feet
SF- Square Feet
 

new york buildings for saleGraphs and Statistics


Noteworthy New York City Leases:
  • St. Paul Travelers leased 210,609 sf at 485 Lexington Avenue.
  • Beijing Vantone Real Estate Co. agreed to lease 200,000 sf at 7 World Trade Center. The office space will house The Open Center, occupied by other Chinese companies that want office space in New York City. Beijing Vantone, Ameriprise Financial, and New York Academy of Sciences will bring occupancy at 7 World Trade Center to 15% leased.
  • Wachovia leased an additional 75,000 sf at 375 Park Avenue, the Seagram Building, expanding from 180,000 sf in the same building.
  • Cambridge University Press leased 64,000 sf at 32 Sixth Avenue in Tribeca for $35 per sf.
  • Fairchild Publications Inc. leased 52,573 sf at 485 Lexington Avenue.
  • The Soloman Guggenheim Foundation leased 40,000 sf from Trinity Real Estate at 345 Hudson Street.
  • Merill Lynch, Pierce, Fenner & Smith leased 39,700 sf at 1251 Avenue of the Americas.
  • Atlantic Theater Company leased 25,000 sf at 111 Eighth Avenue.
  • Herman Miller Inc. leased 23,980 sf, the entire 17th floor, at 1177 Sixth Avenue, moving from 660 Madison Avenue.
  • Balyasny Asset Management leased 20,250 sf on the 26th and 27th floors of 135 East 57th Street.
  • Law firm Entwistle & Cappucci subleased 20,000 sf at 280 Park Avenue for 9 years from Bank of America.
  • Pearl River leased an additional 10,000 sf at 477 Broadway.
  • Citigroup chairman, Sandy Weill, leased 10,000 sf at 767 Fifth Avenue.
  • Seattle based Callison Architecture leased 10,000 sf at 100 Fifth Avenue.
  • Sephora leased 6,700 sf at 150 Broadway and Liberty Street for 15 years.
  • Israel based Sabon leased the last storefront on Sixth Avenue between 55th and 56th Streets, about 800 square feet. Sabon, an upscale cosmetics chain, was represented by IGDNYC, Inc.


New York City Buildings for Sale:
  • 29 West 57th Street, gold-leafed 1924 Art Deco tower, is for sale by European Investors and should go for $50 million.