Year in Real Estate

Spec No More: 51 Astor Lands First Tenant

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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

REIT Beat

Vornado Rebounds with Positive Second Quarter

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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.” Read More

Market Report

Class B Rents in Midtown South Surpass Midtown

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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. Read More

Postings

The CompStak Office Index

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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. Read More

2Q13

The Return of the Mega Deal

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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. Read More

Market Report

Leasing Activity Up in May as Tech Firms Dominate

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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. Read More

Facelifts

Frank Gehry to Design Facebook’s New Offices at 770 Broadway

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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.” Read More

The Sit-Down

Master of His Domain: Edward Minskoff on 51 Astor

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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

Postings

The B Team: The Biggest Occupancy Shifts in Class B and Class A Buildings

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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. Read More

Market Reports

Midtown South Landlords Rule With Iron Fist Despite Spike in Availability

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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.” Read More

Lease Beat

J.Crew Expands at 770 Broadway

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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. Read More

Lease Beat

Google Narrows Expansion Search

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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. Read More