From a Taconic Investment Partners project in Hunts Point to the World Trade Center site in Lower Manhattan, power in New York real estate circles has increasingly expanded from the comfortable confines of Midtown Manhattan to the fringes of all five boroughs. While large developments such as the Related Company’s Hudson Yards often dominate the conversation, Brooklyn, Queens and even the Bronx continue to grow in stature.
Long Island City is fast becoming a focal point for the real estate industry as Rockrose and other residential developers tap into the growing Queens neighborhood. In the Bronx, Taconic Investment Partners, formerly the owners of 111 Eighth Avenue, is in the process of a significant capital improvement plan at the BankNote Building on Lafayette Avenue in Hunt’s Point.
Below, a sampling of where power thrives in New York City in 2013.
From the outside, 222 Broadway fits the stereotype of the Downtown financial office tower.
But when Bank of America downsized, leaving roughly 250,000 square feet of space vacant, a series of tours guided by its new owner, L&L Holdings, quickly blasted that stereotype away.
Condé Nast committed to 80,000 square feet at the tower in early March. WeWork, which provides collaborative workspace for tech and media companies, was next in line.
A decade ago, a walk down Fifth Avenue near 17th Street would have included a stop at advertising firm Geer DuBois, and a walk farther north on Park Avenue South would have culminated in a visit to Angelo & Maxie’s Steakhouse.
Both were pioneering tenants, willing to take a chance on the less desirable precincts of Midtown South—and both are gone.
Midtown South is starting to look a little like Downtown North.
In the latest sign of the evolution of Manhattan’s former no-man’s land between Midtown and Downtown into the hottest office submarket in the U.S., Cushman & Wakefield last week noted a migration of financial firms into Midtown South and a corresponding overflow of technology and media firms into the Financial District over the past 10 years.
“We’ve never seen such an intertwining of the Midtown South market and Downtown,” Andrew Peretz, executive vice president at C&W, said in an interview.
Google has completed a deal to expand its presence at Chelsea Market by approximately 90,000 square feet, a source familiar with the deal confirmed with The Commercial Observer.
The tech giant’s total space at the Market will now total about 250,000 square feet. The new space is spread throughout the building, according to the source.
News of the lease was reported by the New York Post earlier this week. According to an earlier report by Crain’s, the deal includes a sublease of market research firm GFK’s fifth-floor space of 58,523 square feet.
The Year in Review
This past February, 10Gen, developer of the computer system database MongoDB, was in search of new office space, specifically in tech- and media-rich Midtown South.
The company needed a large open layout for its workers, with an option for more space to allow the firm to grow—plus an option to terminate. Unfortunately, the ultra-tight market Read More
Giorgio Armani is getting a view over the High Line. The Italian fashion company has inked a lease for a 60,000-square-foot space at 450 West 15th Street in the Meatpacking District, sources familiar with the transaction confirmed to The Commercial Observer, and is due to move its headquarters and showroom to the space in October 2013.
New York-based real estate private equity and asset management firm Savanna has closed on its acquisition of two adjacent loft-style office buildings at 245 West 17th Street and 249 West 17th Street in Chelsea for $75.8 million, city records show.
Originally a dry goods warehouse and wagon house for the Siegel-Cooper Company department store, the property at 249 West 17th Street is a 145,000-square-foot, six-story building. The other property, equal in square footage, is 12 stories high.
The two properties have a combined 40,000 square feet of office space and are located within a couple blocks of Chelsea Market, the Meatpacking District and Google’s 111 Eighth Avenue.
Penn Plaza, the area surrounding Penn Station, has historically been a hub for firms that rely on transportation, namely the Long Island Rail Road and New Jersey Transit. Recent development, however, has taken the district in a new direction.
“We are seeing a wave of social media, advertising, marketing and high fashion tenants taking advantage of the still favorable value differential in the Penn Station submarket,” said Kevin Hoo, the vice president of Savanna. “Google’s presence at 111 Eighth Avenue and the tightening in that market has also begun to drive creative tenants northward into this submarket.
“We think that the transformation of Manhattan’s West Side has already begun and that these new tenants continue to provide increasing momentum in that direction,” Mr. Hoo added.
The fashion house Armani is said to be poking around the market for space.
The company bases its Manhattan offices at 111 Eighth Avenue, an office building owned and largely occupied by Google, but it won’t be able to stay much longer. Google has refused to renew tenants’s leases in the nearly three million-square-foot property in order to clear a path there for its own growth.
The Lawyers You Call
Jay Neveloff is a partner at Kramer Levin Naftalis & Frankel whose practice is focused on real estate and other commercial transactions. His past and present client list includes Starwood Hotels, the owners of Starrett City, New York Life Insurance Co. and the Trump Organization. Mr. Neveloff spoke to The Commercial Observer last week about how land-use issues have evolved in the city over the past 10 years.
Spotify is on the verge of signing a 73,000-square-foot lease for the entire seventh floor of 620 Avenue of the Americas several sources familiar with the deal say.
The company, which provides online streaming music services, will move to the building from 111 Eighth Avenue.
For those who saw signs of improvement in the market earlier this month, look again. While not necessarily worse than the previous reporting period, second-quarter office leasing was propped up primarily by a pair of big renewal deals inked for Viacom and Morgan & Stanley. A closer look at the numbers, meanwhile, seem to suggest that leasing in nearly every asset class is down, down, down—not least of all in Midtown, where Class A office leasing plummeted by 50 percent. With the help of Cushman & Wakefield’s first-quarter statistics, and the firm’s lead researcher Ken McCarthy, The Commercial Observer took a look at Manhattan’s three primary office markets and read between the lines to figure out what it all means. After the jump, an annotated guide to office leasing activity in the second quarter.
RXR Realty has signed furnishings giant Knoll, Inc. on for 50,000 square feet of space at its 1330 Avenue of the Americas. Knoll will most make the move to the second through fourth floors at the 534,000-square-foot building during the first quarter of 2013.
The advertising firm Deutsch Inc. is renewing its lease at 111 Eighth Avenue, dealing yet another blow to Google’s plans to expand in the building it forked over more than $2 billion to acquire in early 2011.