New York Market Overview
Office:
The Durst Organization signed Venable LLP for a 15-year lease for nearly 158,000 square feet, at One Five One, formerly known as 4 Times Square.Prospective tenants are looking for 6.5 million square feet of office space up 64% from the first quarter of this year.
- Crédit Agricole’s 167,000-square-foot relocation within 1301 Sixth Avenue.
- BDO USA’s 143,000-square-foot lease at Tishman Speyer’s 200 Park Avenue.
- Interpublic Group of Companies 514,000 square feet at 100 West 33rd Street.
- Fried, Frank, Harris Shriver & Jacobson 400,000 square feet at 1 New York Plaza.
- City of New York 313,000 square feet at 60 Broad Street.
Office demand in the Penn District more than doubled in the third quarter, to 1.7 million square feet. Facebook, last year signed a 730,000-square-foot lease at Vornado Realty Trust’s Farley Post Office redevelopment.
Employees are slowly beginning to head back into their workplaces, in a positive sign for the national office market. An average of 36% of the workforce in those cities were back in the office during the week of October 4-8.
New York City, one of the biggest office markets in the country, saw a rise of almost 10% of employees' return. At the beginning of September, usage was at 21%.
While 30% of the workforce back in the office may seem to be a reason to celebrate, the Delta variant and surges in infection rates across the country has since.
PriceWaterhouseCoopers is allowing the entirety of the U.S. workforce to work remotely full-time. This will allow 40,000 client services to work remotely permanently.
Manhattan office availability is 18.4% above the five-year average of 10.8% before the crisis. There were 39 blocks of office space, 250K SF or larger,,available to lease at the end of September, which combined account for nearly 16.5M SF of availability in the market.
When Deutsche Bank leaves 60 Wall Street and 2 Manhattan West reaches completion, another 3 million sf will be added to the city's supply of office availability.
There is about 25 million sf of office construction slash major renovations that will be completed between 2022 and 2024.
The 10 Manhattan Office Buildings With The Biggest Blocks Of Space To Rent:
- 66 Hudson Blvd. Owner: Tishman Speyer
Large block availability: 1.14M SF. - 111 Wall St. Owners: Nightingale Properties and Wafra Capital Partners
Large block availability: 1.04M SF. The entire building, which spans a total of 1.2M SF, is empty. - 5 Times Square Owner: RXR Realty and investor David Werner
Large block availability: 990K SF. Asking rent at $80 to $100 per RSF. - 80 Pine St. Owner: Rudin Management
Large block availability: 870K SF. Asking rents are set to be in the mid-$50s per SF. - 3 Times Square Owner: Rudin Management in a joint venture with Thomson Reuters
Large block availability: 780K SF. Asking rents will be the low-$70s to mid-$80s per RSF. - 550 Madison Ave. Owner: Olayan America
Large block availability: 750K SF. - 175 Water St. Owner: Metroloft Management
Large block availability: 680K SF. - 295 Fifth Ave. Owners: Tribeca Investment Group, PGIM Real Estate and Meadow Partners
Large block availability: 670K SF. - 330 West 42nd St. Owner: Deco Tower Associates
Large block availability: 660K SF. - 341 Ninth Ave. Owner: Tishman Speyer
Large block availability: 630K SF. The space available is direct space and sublease space from Dentsu.
Top Tenants at 345 Seventh Avenue:
| S.No | Tenant | Square Feet | Base Rent psf ($) | Expiry |
|---|---|---|---|---|
| 1 | Adstream NA | 8,663 | $48.74 | 2021 |
| 2 | Clover II | 8,648 | $37.57 | 2023 |
| 3 | Chinagraph | 6,607 | $44.63 | 2024 |
| 4 | Sky IT | 6,366 | $49.40 | 2025 |
| 5 | Gillis Preveti | 5,772 | $39.12 | 2021 |
| 6 | Mitsubishi | 5,396 | $40.00 | 2024 |
| 7 | Davi | 4,853 | $51.61 | 2026 |
| 8 | Fox Unlimited | 4,752 | $40.42 | 2022 |
| 9 | Zoom Media | 4,035 | $55.16 | 2025 |
| 10 | Corporate Resolution | 3,457 | $59.81 | 2026 |
| Top Tenants | 58,549 | $45.60 |
Retail:
In the past 12 months, Madison Avenue’s rents were down 23% and Fifth Avenue, between 42nd and 49th streets, dropped 11%. Soho saw a lot of new leases in the city, space availability remains high, at almost 35%, with apparel retailers continuing to struggle.Across Manhattan’s major retail districts, leasing volume rose almost 13% from the second quarter, but remains down nearly 57% from a year earlier.
Retail supply remains elevated, with availability at more than 27%, with a jump in sublease additions. Tenants still have the upper hand, with new leases including as many as nine months of free rent and some allowances for store improvements.
Retail leasing activity rose 4.4 % from the previous quarter. The city’s retail recovery is uneven across neighborhoods. Midtown storefronts are feeling lost without office workers, sinking to a nearly 30% retail vacancy rate in the summer.
Retailers in central business districts were down 33% in spending this year when compared to 2019 levels. Retailers in residential areas won out.
Givenchy, Gucci and Jonathan Adler opened stores in Soho or the Meatpacking District.
Chelsea Piers Fitness signed a 20-year lease at 1 Madison. The lease is for nearly 56,000 square feet.
