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.
Ellis Lake Capital is set to take one of the top floors in 444 Madison Avenue, and at more than $100 per square foot, the deal is among the biggest of the year and an indication that the market is picking up steam.
Lately overshadowed by neighboring Midtown South, the Midtown market is feeling the pressure. Year-to-date leasing remains below the 10-year average, and vacancy rates have been stagnant for the past two years.
Jonathan Mazur, director of research at Cushman & Wakefield, spoke with The Commercial Observer last week to shed light on several of the more significant numbers from the firm’s February Midtown office market report, ahead of the brokerage firm’s release of its quarterly statistics, set for later this week.
While the story in Midtown South over the past two years has inarguably been Class B and, to a lesser extent, Class C buildings and their increasing cachet among tech startups, the story in lower Manhattan is still all about Class A properties. With approximately five million square feet of new inventory coming online next year with the completion of 1 World Trade Center, the market will boast some of the most efficient and modern space in all of Manhattan.
More immediately, however, approximately two million square feet of space at the World Financial Center is expected to be made available by next month, thanks to lease rollovers by Nomura and Deloitte, among other major tenants. With such availability of Class A space, no wonder the asset class saw a 30 percent uptick in leasing from last February. Jonathan Mazur, director of research at Cushman & Wakefield, clued The Commercial Observer in on some other big statistical changes in lower Manhattan last week and gave us a sense of what’s to come in 2013.
Everybody Go Downtown
After the storm, things are looking brighter for the lower Manhattan real estate market.
Even with construction scaffolds clogging the district’s narrow streets in a reminder of Hurricane Sandy’s devastation, Downtown office leasing activity jumped 73 percent in the first two months of the year, according to Cushman & Wakefield.
Early indications suggest that the period between October and December will clock in as the most active fourth quarter since 2007, just before Manhattan’s office market imploded.
And while lease flow in 2012 was a far cry from 2011, when deals by Condé Nast and Nomura Holding straddled the million-square-foot precipice, a bevy of eleventh-hour transactions by Microsoft and Kaye Scholer in the fourth quarter of 2012 helped close the gap.
The Commercial Observer reviewed fourth-quarter leasing in Midtown South with Cushman & Wakefield Director of Research Jonathan Mazur last week in an bid to gleam a snapshot of the quarter. An annotated guide, after the jump.
Times of change and uncertainty are always worrisome for investors—fear takes hold, spending is called into question and valuations become unpredictable.
Mix an election season with the impending threat of a potentially devastating fiscal cliff, then throw in a destructive, rogue tropical storm named Sandy, and you’ve created an environment that is not conducive to a stellar business quarter for the commercial market.
However, thanks to tax law-motivated sales and retail—as well as a handful of big end-of-year leasing deals—the fourth quarter ended on a relatively positive note, despite a slowdown in leasing activity.
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