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If you think the New York City commercial real estate market was tight before, think again. Real estate vacancy levels have reached a new low point with a dearth ofl spaces available in Midtown and Downtown. Landlords are continuing to raise rents and lower the concessions in terms of free rent and work offered.
WTC:
Moody’s executed a lease to become the anchor tenant at 7 WTC taking 600,000 SF on 15 floors. They were quickly followed by the law firm Darby & Darby (see leases below). The Vantone lease on the other hand is officially dead. The Freedom Tower also has its first prospective tenant in the US Customs and Border Protection Agency.
Midtown South:
Stuyvesant Town and Peter Cooper Village on the Lower East Side are up for sale and the reported price is $5 Billion. The site contains 110 apartment buildings with about 11,232 apartments at an average price tag of $450,000 per unit plus 100,000 SF of retail space.
Midtown:
5 Times Square is for sale with an asking price $1.25 Billion. The building contains 1,100,000 SF of office space. Meanwhile, Walentas Two Trees Management plans to build 1,000 apartments on the former Verizon site on 53rd and 54th streets and Eleventh Avenue.
Outer Burroughs:
Stephan Siegel and SG2 Partners are in contract to buy 4,000 apartments in the Bronx. Citigroup will be moving 1,600 jobs from downtown to New Jersey, and Deutsche Bank is moving another 1,200 to the Harborside Complex in Jersey City, right across the Hudson.
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Noteworthy NYC Leases: |
- The U.S. Customs and Border Protection Agency, part of the Department of Homeland Security signed the first lease at the Freedom Tower for 600,000 SF.
- Morgan Stanley signed a lease for 550,000 SF at 522 Fifth Avenue.
- Limited Brands took 320,000 SF at 1740 Broadway.
- Bear Stearns signed two leases; one for 150,000 SF at 237 Park Avenue, and another for 100,000 SF at the nearby 320 Park Avenue.
- Baker Hostetler too 84,000 SF at 45 Rock, also known as the international building.
- Darby & Darby, a midtown intellectual property law firm leased 80,000 SF at 7 WTC
- Simpson, Thacher and Bartlett, one of the largest and oldest law firms in New York City signed a lease for 78,255 SF at 666 Third Avenue.
- Citadel Investment Group leased 60,000 SF at the recently sold 153 East 53rd Street, also known as the Citigroup Center.
- BearingPoint, Inc took 53,611 SF at 3 World Financial Center, the American Express Tower.
- Equinox Fitness Clubs signed a 52,120 SF lease at SL Green’s 1 Park Avenue. It includes 15,000 SF of office space.
- UBS, the Swiss investment bank leased 45,000 SF at 101 Park Avenue.
- Sprint Nextel Corp. leased 37,400 SF at 1166 Sixth Avenue.
- Avaya leased 29,000 SF at 2 Penn Plaza, and HQ Global leased 27,877 SF at 5 Penn Plaza.
- Hedge Fund Alson Capital Partners leased 18,400 SF on the 42nd and 43rd floor of 152 W. 57th Street, the Carnegie Hall Tower for a reported $105 per foot.
- Interior designer Charlotte Moss signed a leased for 7,200 sf at 20 E. 63rd Street.
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New York City Office Rentals: |
- Total New York City Office Class A vacancies dropped from 17.03 million RSF to 16.97 million RSF, as total vacancy dropped from 27.40 million RSF to 27.16 million RSF.
- Total New York City Office direct lease vacancy dropped from 23.42 million RSF to 23.18 million RSF, while sublease vacancy held steady at 3.98 million RSF.
- Total New York City Office Market vacancies dropped as Midtown South Office vacancy remained constant at 4.35 million RSF. Midtown Office vacancy rose from 12.92 million to 13.10 million RSF while total New York City Downtown vacancy dropped from 10.12 million RSF to 9.71 million RSF.
- Total vacant Office Space in Midtown New York City rose led by a rise in sublease space from 1.99 to 2.16 million RSF. Total vacant direct space rose slightly from 10.93 million RSF to 10.94 million RSF.
- Midtown South Office direct lease vacancy dropped from 3.89 million RSF to 3.87 million RSF, while sublease vacancies rose from 0.46 to 0.48 million RSF.
- Total Downtown New York City Office vacancies dropped with direct lease space decreasing from 8.59 million 8.37 million RSF. Total vacant sublease space decreased from 1.53 to 1.34 million RSF.
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New York City Retail Space Rentals: |
- Total available New York City Retail Space dropped from 0.71 to 0.70 million RSF.
- Midtown South Retail space vacancies remained constant at 0.40 million RSF while in Midtown vacancy stayed at 0.13 million RSF.
- In Downtown, retail vacancy also remained constant at 0.15 RSF.
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New York City Industrial Rentals : |
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New York City Buildings Sold : |
- 1211 Sixth Avenue, a 1.9 million SF office tower with 45 floors was sold to a partnership of Beacon Capital and Lehman Brothers for $1.5 billion, at about $800 per SF.
- 2 Park Avenue, a 28 story, 850,000 SF office building was sold to L&L Holdings and General Electric for an undisclosed amount.
- 135 West 50th Street, the Sports Illustrated Building with about 800,000 SF of office space was sold to UBS Bank for $300 million or $375 per SF.
- 575 Lexington Ave, a 600,000 SF office property, owned by the Koeppel family was sold to a partnership including Larry Silverstein and a California pension fund.
- 55 Broadway, a 32 story office tower with about 300,000 SF of office space was sold to Broad Street Development Corp. for $82 million, or $273 per SF.
- 200 East 62nd Street and 165 East 66th Street, upper east side apartment buildings known as the Wellington and the Westminster were sold to CalPERS and Blackrock for a combined total of about $325 million.
- 1140 Sixth Avenue, a 191,000 SF office building was sold to Stellar Management and the Rockpoint Group for almost $100 million or $510 per SF.
- 31 W. 27th Street, a 128,000 SF loft and office building was sold to the Witkoff Group for $31.5 million.
- The Utopia Center in Fresh Meadows, Queens, a 110,000 SF office and retail property was sold to a New Jersey investment group for $51 million.
- 45 Broad Street, a 70,000 SF office building was sold to Swig Equities for $34.5 million and includes 55,000 SF of air rights. The building went for $493 per SF while the air rights and building together were worth $276 per SF.
- A development site at the corner of 42nd Street and Eighth Avenue, directly across from the Port Authority was sold to SJP Properties for $260 million and will become the site of a new office tower.
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