Stat of the Week
In honor of this week’s Power 100 rankings of real estate professionals, I figured I would create the first annual Power 5 rankings of the top submarkets by year-to-date leasing activity. To make things even across all 17 submarkets, they are based on leases signed and renewed as a percentage of the submarket’s total inventory. So without further ado, here are the Power 5.
Midtown Manhattan, the biggest and most expensive U.S. office market, is still adapting to New York’s post-financial-crisis economy, as technology and new media companies flood into the more affordable areas and banks remain wary of expanding in higher-priced real estate.
With construction getting under way on millions of square feet of planned Class A offices on the West Side, much of the leasing action for the year to date has centered on neighborhoods like Murray Hill, the Penn Station area and the Garment District, which are attracting companies that have been priced—or crowded—out of the technology hub in Midtown South, brokers said. Financial companies, traditionally the biggest occupiers of Midtown real estate, remained conservative, pursuing greater efficiency in their use of real estate rather than growth.
“The days of bigger is better are gone,” said Eric Thomas, senior vice president of Cresa, a specialist in tenant representation. “Capital preservation is still key. That’s why renewals still reign in many cases.”
The Manhattan office leasing market experienced a jump in activity of 19 percent year-over-year from February 2012, according to the March 2013 Manhattan Marketview Snapshot from CBRE. Leasing activity was also up nine percent over January 2013, the report noted.
“February leasing remained below the 60-month monthly average, so the increase in activity compared to one year ago at this time signals an improvement of the market,” said Matt Maison, Manhattan manager, research and analytics at CBRE.
The overall availability rate in Manhattan rose 20 basis points in February to 12.5 percent. Average asking rents rose two percent, or $1.12, to $60.56 per square foot, representing an increase from February 2012, when average asking rents were $54.40 per square foot.
Macy’s has renewed its lease for the 646,000-square-foot space at 11 Penn Plaza, it was announced yesterday.
The new lease runs through 2035, according to a statement from Vornado Realty Trust, which owns the building. Financial terms were not disclosed.
EMC Corporation is expanding by about 37,000 square feet at 2 Penn Plaza, where it bases the bulk of its Manhattan operations.
The firm is a Fortune 500 company that specializes in information technology and cloud computing services and is growing according to people familiar with its space needs.
The office suite firm Regus is taking two floors totaling about 50,000 square feet at 112 West 34th Street, The Commercial Observer has learned.