New York Market Overview

Office:

Leasing volume was up in Manhattan in May, with 3M SF of office although below the 3.6M SF monthly average in 2019.

Bloomberg leased nearly 1M SF renewal 731 Lexington and will stay until 2040 in the same footprint.

American Eagle’s leased 338,000-square-foot lease at 63 Madison Avenue.

Bain & Company signed a 235,000 square feet across four floors at 22 Vanderbilt . The asking rent varied by floor, between $105 and $120 per square foot.

Palantir’s 140,000 square-foot renewal at 620 Sixth Avenue .

126K SF lease signed by The Trade Desk 1114 Sixth Avenue.

TD Bank’s 80,000 square-foot lease at 22 Vanderbilt.

Duane Morris’ 79K SF lease, also at 22 Vanderbilt.

Herrick Feinstein’s 77K SF renewal and move within 2 Park Avenue.

Conde Nast’s subleased 48,000 square feet at one World Trade Center to Kroll. The 10-year deal covers the entire 31st floor of where the asking rent was $59 per square foot.

1M SF at 111 Wall St. was removed from the market as its owner pursues a residential conversion for the vacant office building.

The Manhattan office market showed increased leasing activity in Midtown, Midtown South and Downtown. Leasing demand grew to 2.75 million square feet. The availability rate held steady from last month at around 18%.

Midtown South office demand increased 78% since March and more than tripled since last April. Class A buildings continued to account for most of the leasing activity. Office demand is still below the pre-pandemic monthly average from 2019. The availability rate has grown 80% since March 2020 to almost 97 million square feet with 43 million square feet of negative absorption.

In the Midtown office market, Park Avenue availability rate is down to 8.9%, about half of Midtown’s 17.6%. The rate was 11% on Park Avenue in the fourth quarter of 2019, the last quarter before the pandemic.

Law firms leased roughly 1.7 million square feet across the country in the first quarter, a 47.6% increase from last year’s first quarter. The quarterly average of leasing activity by law firms has been 2 million square feet since the start of last year, compared with a 1.5 million-square-foot average between 2020 and 2023. The quarterly average from 2018 to 2019 was 1.8 million square feet.

WeWork is leaving Tower 49 moving to 18 West 18th Street, Wework rejects its 300,000-square-foot lease at Tower 49. WeWork said it would relocate its 2,800 members as it consolidates its portfolio.

Pontera signed a long-term lease at the Empire State Building for 41,000 square feet. The asking rent was $79.00 per square foot and they are relocating from their current 11,000 square-foot space at 111 West 33rd Street. 350 Fifth Avenue is now 93% leased.

Third Avenue, long a second-tier office market for tenants seeking discounted space, has been hit particularly hard by the move to hybrid work. Vacancy along the corridor is around 20%, while other Midtown stretches such as Sixth and Park avenues are in the low teens.

Retail:

Floor & Decor has signed a 129K SF lease for the second floor at 850 Third Ave. at Liberty Brooklyn in Sunset Park .

Spear physical therapy, Grape Stomper Cannabis House and Wells Fargo signed leases at 2273-2279 Broadway for 13,600 square feet. Asking rent was $375 per square foot and the leases are for 10 to 12 years.

Maison Goyard leased 9,000 square feet at 699 Madison Avenue.