Year in Real Estate
Edward Minskoff was unfazed in April when he rather pointedly blamed the media for allegations that his “spec” office tower gamble at 51 Astor Place had backfired.
“These are words that are coming from media types that don’t understand our business, so they make assumptions—and by definition an assumption is not a statement of fact,” Read More
Vornado Realty Trust reported its second quarter results on Monday, with funds from operations up to $235.3 million, or $1.25 per diluted share, from $166.7 million, or $0.89 per diluted share, for the same period last year.
“It was a positive quarter,” Michael Knott, managing director at Green Street Advisors, told The Commercial Observer. “The first quarter was very noisy from an accounting standpoint.”
Demand for space in Midtown South, where the majority of properties are Class B, drove effective rent for buildings in that classification beyond Midtown in the second quarter, according to data from CompStak. Midtown South Class B effective rent was $46.67 per square foot for the quarter, while Midtown registered effective rent for Class B of $44.17.
Though availability is tight in the city’s hottest submarket, those companies that are able to find space are driving up rents–and there is no end in sight.
Overall, Manhattan rents were flat in June after posting impressive increases through April and May. Midtown’s starting rent increases continued as several more leases for high-end office space were signed. Midtown South saw leasing activity and rents drop slightly—a normal occurrence in the month after a rare large Class A office lease is signed (Facebook at 770 Broadway). Downtown rents remained flat despite reasonable activity, posting a miniscule drop, which can be attributed to large blocks of space becoming available.
June’s largest office deals included Och-Ziff in the Solow Building, New York Media in Hudson Square, and New York County Health Services Review Organization in City Hall.
Dominated last year by smaller middle-market transactions, New York’s investment sales market has welcomed the return of large institutional transactions in 2013, while leasing activity in the first half of the year also experienced positive year-over-year growth.
With 10 transactions in excess of $400 million under contract through the second quarter, 2013 is set to be the single most active year for large deals since the Great Recession began in early 2008, according to midyear statistics from Cushman & Wakefield.
Manhattan leasing activity was up 24 percent year-over-year in May to 2.08 million square feet, up from 1.68 million square feet in May 2012, according to CBRE’s latest Manhattan Marketview Snapshot. The three largest new leases were from tech firms, including Facebook’s new lease at 770 Broadway, the report noted.
Tech leasing was led by Yahoo!, which snapped up 176,201 square feet at 229 West 43rd Street, the former headquarters of The New York Times. Yahoo!’s lease led the Midtown market, where leasing was up 26 percent over the five-year average of 1.17 million square feet.
A-list starchitect Frank Gehry will team up with Facebook on the design of the social media kingpin’s “big,” “open” and “cozy” new offices at 770 Broadway in New York.
Mr. Gehry is currently working with Facebook on the expansion of its Menlo Park, California headquarters. The 100,000-square-foot Village office will share certain elements–collaborative spaces, an uncluttered floor plan, an abundance of white boards and videoconferencing rooms–with the West Coast mothership but, per an announcement by Facebook’s New York engineering team site director Serkan Piantino, also “be distinctly Big Apple in design.”
Facebook has reportedly signed a 10-year deal for about 100,000 square feet of space at 770 Broadway, with an option to expand into an additional 60,000 square feet over the next two years.
The social media giant will take the entire eighth floor and part of the seventh at rental rates in the mid $70s Read More
Edward Minskoff has developed close to 37 million square feet of property in 10 cities around the country. His latest dive into Midtown South comes at 51 Astor Place, where a 13-story, 430,000-square-foot dark glass building will open next month, fueled by a red-hot office market and Mr. Minskoff’s personal faith that the neighborhood will Read More
For the first time in recent history, the availability rate across Manhattan’s stock of Class B buildings is lower than that of their Class A counterparts, suggesting a flight to value, propelled in part by the latest wave of technology startups and media companies looking for affordable space. Indeed, at 10.6 percent, the current availability rate for Class B space is 170 basis points less than the Class A rate of 12.3 percent, according to Richard Persichetti of Cassidy Turley.
With Cassidy Turley’s help, The Commercial Observer decided to put a spotlight on some of the most dramatic occupancy shifts across Manhattan over the last three years.
Despite a fair share of new product hitting the Midtown South market in January, landlords continued to call the shots, seeking ever-growing rents in the city’s epicenter for tech and creative companies, the latest data from Cushman & Wakefield shows.
The data shows that total space increased year-over-year in January by 9.8 percent to more than 4.52 million square feet, yet average rents also increased by 10.7 percent to $50.61 per square foot.
The boost in available product was pronounced among Class A and Class B properties, with 41.03 and 47.1 percent increases, respectively.
“It is still a landlord’s market even though that space has come online,” said Ken McCarthy, C&W’s chief economist. “Anyone adding space to the market is asking higher rents.”
Retailer J.Crew is expanding its Manhattan corporate offices at 770 Broadway sources say.
Three floors are available at the 1.1 million-square-foot office tower and J.Crew will take one of them in the deal, a roughly 80,000-square-foot space.
Last summer, the company renewed its roughly 300,000 square feet in the building, which is owned by the real estate investment trust Vornado.
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.
Google is searching the market for around 80,000 square feet and the Internet giant is looking closely at 450 West 15th Street and 770 Broadway sources have revealed to The Commercial Observer.
As The CO previously reported, Google has had difficulty buying tenants from their leases at 111 Eighth Avenue, the large Chelsea office building that the company bought at the beginning of 2011 for a whopping $2 billion.
Nielsen is looking to downsize and Vornado, the company’s landlord at 770 Broadway, stands to profit.
The media, marketing and advertising research company, according to a report yesterday in The Wall Street Journal, has hired a leasing team from the brokerage firm CBRE to sublease its space at the 1.1 million-square-foot building amid a boom in the Midtown South Read More