Real estate owners and developers Alfa Development and Park-It Management have snagged a development site in at 117-119 West 21st Street in Chelsea for $12 million, where they plan to construct a high-end residential development, The Commercial Observer has learned.
The site is currently occupied by a four-story vacant warehouse with 44 feet of frontage and Read More
After two years of consecutive increases, rents in Midtown South dropped during the first quarter of 2013, according to CompStak’s effective rent report for the Manhattan office market, provided exclusively to The Commercial Observer.
Effective rent, which includes landlord concessions, in Midtown South fell during the first quarter to $44.62 from $46.44 in the fourth quarter of 2012, a decrease of nearly 4 percent. Starting rent fell from $49.47 to $47.14 during the same period.
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.
Midtown South has continued its meteoric rise, overshadowing the traditional office market in Midtown. Demand remains strong in the market, where more than 12 million square feet of space has been leased in the past three years.
As large tech tenants like Google—which subleased 83,000 square feet at Chelsea Market in the last quarter—continue to snap up space, the market only stands to continue its growth.
Jonathan Mazur, director of research at Cushman & Wakefield, spoke with The Commercial Observer last week to shed light on some of the key numbers from the firm’s recent Midtown South office market report for the first quarter of 2013.
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.
GFK Market Research is closing in on a 75,000-square-foot lease at 1 World Financial Center, Crain’s New York reported yesterday.
It is believed GFK will take one of the building’s lower floors on a 10-year lease. Asking rent is in the $40s per square foot, Crain’s reported. There is currently vacant space on the fourth and fifth floors, according to the report, both measuring approximately 75,000 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.
Late last year, when the education publishing company Scholastic offered up about 60,000 square feet of sublease space at the top of the Soho office building 568 Broadway, the firm quickly found it wouldn’t be difficult to fill.
Within weeks, a host of tenants were competing for it, including several tech firms, one of the most active sectors of the leasing market in Manhattan right now. Tumblr, foursquare and AppNexus, all well-known names in the industry, moved to the front of the pack.
On the face of it, such a decision would seem easy. Of the three, only AppNexus, a firm that specializes in online advertising and is backed by the software giant Microsoft, is known to be profitable. But in a tech boom in which riches don’t always flow from the most likely sources, the deal for the space took a different turn.
The competition soon boiled down not to AppNexus but to Tumblr and foursquare, two companies that have become top brands in the new internet boom and have raised tens of millions of dollars in venture capital between them, but have yet to find income-producing platforms for their services.
SL Green has bought two Midtown South buildings for $173 million as part of its effort to expand into the booming submarket. The two adjoining buildings were once part of a single Ladies’ Mile department store.
The buildings, 635 Sixth Avenue and 641 Sixth Avenue, were bought from Atlas Capital Group, whose other New York holdings include 845 West End Avenue and 24-02 Queens Plaza South.
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.