New York Market Overview

Office:

Developers have started office projects totaling 2.1 million square feet since the beginning of 2021, well below the 3.2 million square feet of office construction starts in 2019 and the 5.7 million square feet of office construction starts in 2020.

There are 19 million square feet of office construction underway in Manhattan.

Deliveries are expected to surpass supply in both 2022 and 2023, increasing the supply of office stock by 4%, after that, however, office deliveries will likely begin to fall off in 2024, a decline that may continue through 2027.

Many office tenants appear to be ready to sign leases having adjusted to a hybrid work model. Two thirds of remote workers were reluctant to go back to the office. The biggest advantages to staying home: No commute and saving money. Google will recall some of its workers to the office and expects most employees to come into the office three days a week.

JPMorgan Chase, reduced its offices by 400,000 square feet last year and 300,000 square feet in 2020. But still rents 8.7 million square feet in the city.

Wells Fargo reduced its commercial space by 600,000 square feet last year. And is trying to sublease 700,000 square feet at 4 New York Plaza in the Financial District and 100,000 square feet at its Hudson Yards office at 5 Manhattan West.

94 million square feet of office space is available for rent in Manhattan. Last month the availability rate reached 17.4 up 74% since the start of the pandemic in March 2020, even as demand has more than doubled from a year ago.

Sublet availability increased by 1.27 million square feet, bringing monthly absorption to negative 1.16 million square feet. While asking rents are up slightly from their pandemic low, the going rate of $74.88 per square foot remains almost 6% below pre-pandemic level.

Midtown lost the least, with leasing activity more than doubling year-over-year to 1.49 million square feet. The five largest deals were all for Midtown offices, led by Mutual of America Financial Group’s 252,000-square-foot lease at 320 Park Avenue. Just behind it was AlphaSights’ deal for 236,026 square feet at 100 Park Avenue.

Blackstone is considering options for an expansion or a move. The private equity firm is seeking 1.5 million square feet of office space.

IBM Leases 328K SF At One Madison. The 16-year lease will give the tech company portions of the second and seventh floors, as well as the entirety of the eighth, ninth and 10th floors for 16 years.

UN Women renewed more than 85,000 square feet at 220 East 42nd Street.

Progyny signed a lease for 70,000 square feet at 1359 Broadway.

Suffolk signed a lease at 50 Rockefeller Plaza, and expects to have 160 employees in the space when it moves its current office from 1 Penn Plaza.

The Bliss Group signed a lease at 230 Park Avenue for 26K SF over 10 years.

Roman has agreed to lease 24K SF in Queens at 30-30 47th Avenue in Long Island City.

The International Gemological Institute signed a lease for 24K SF at 545 Fifth Avenue.

Assembly Group LLC has leased 19K SF at 65 Bleecker St.

EC Mergers & Acquisitions signed a 10-year lease for 28K SF and Aurora Health Network took a 14K SF space on the 29th floor.

Khaite signed a lease for 9K SF for offices and showrooms.

Retail:

Chelsea Piers Fitness signed a 20-year, for 56K SF at One Madison which is scheduled for completion in November 2023.

Associated Supermarkets signed a 30-year lease at 229-247 Graham Avenue for 10,700 square feet of ground level and another 10,000 square feet of lower level space.

Swarovski signed a lease for a two-level flagship location at 680 Fifth Avenue for 14,000 square feet.

Todd English is cooking up his latest New York City project, a 20,000-square-foot eatery at 15 Park Row.

Amazon to close 68 brick-and-mortar stores. Amazon is to close all of its storefront bookshops, pop-ups, toy and home-goods shops.