By Stephen Kleege 4/09 7:30am

Cover Story

Gas Odor Investigated In New York City

The Landlord’s Market: Midtown South’s Uphill Climb

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. Read More

By Billy Gray 4/03 2:11pm

1Q 2013

Madison Avenue fetched some of the city's highest office rents, but also had the largest vacancy rate.

Direct Available Manhattan Office Space Reaches Four-Year Low, Reports C&W

A Cushman & Wakefield report released today finds that there was less direct available office space in Manhattan in the first quarter than at any point since April of 2009.

So far this year, Class A, B and C office leasing activity totals 5,633,974 square feet, a 2.3 percent decline from the same period last year. The total vacancy rate across 1,401 buildings held steady at 9.1 percent. The average rental rate edge up 1.2 percent, to $59.69 per square foot. Read More

By Billy Gray 3/28 7:00pm

The Sit-Down

Ashkán Zandieh

ABS Partners’ Ashkán Zandieh on the Sociology of Tech and NYC’s Race Against San Francisco

“The ability to socialize and collaborate is one of the founding blocks of creating a tech community,” writes Ashkán Zandieh, director of the creative and start-up advisory division at ABS Partners Real Estate, in the latest edition of his quarter TechStarter report. Mr. Zandieh has been involved with the technology sector for seven years. He created and sold a start-up, has advised several fledgling companies and tracked the field’s real estate activity for the past year. From ABS Partner’s Union Square area office, Mr. Zandieh is well-positioned to observe and dissect the red hot Midtown South tech real estate market and, if he looks south, the growth of the Financial District as a tech and new media contender.

Mr Zandieh spoke by phone with The Commercial Observer.

The Commercial Observer: How is the tech-fueled Midtown South commercial real estate market holding up?

Mr. Zandieh: The average asking rental price per square foot increased from an estimated $38 per-square-foot in 2011 and 2012 to nearly $60 per square foot for Class B buildings in Midtown South in the first quarter of 2013. What’s pretty interesting is that we’re seeing a Class B transition–there’s a fuzzy line between Class B and Class C.

So young companies are still drawn to, and able to afford, the neighborhood?

A lot of the start-ups I’m working with now are down in Soho and expanding by 20 or 30 employees. They’re moving out of Soho and to NoMad, where they can get larger floor plates. By NoMad, I mean 23rd Street to 28th Street between Park and Seventh Avenues. Read More

By Billy Gray 3/13 3:55pm

Lease Beat

222 Broadway

WeWork Leases 120,537 Square Feet at 222 Broadway, Builds Momentum of “Downtown North”

The collaborative workspace provider WeWork signed a 16-year, 120,537-square-foot lease at 222 Broadway, The Commercial Observer has learned.

David Berkey and Andrew Wiener represented the building owner L&L Holding Company in-house. Mark Lapidus of WeWork and Sean Black of Jones Lang LaSalle represented the tenant. Asking rents at 222 Broadway are in the mid-$50 per square foot range.

WeWork typically provides communal office space to tech and new media companies, making the lease another sign of Lower Manhattan’s growing appeal to that type of firm. Mr. Berkey was quick to point out that tech and media tenants are “nothing new” in the neighborhood.

“I’ve been telling whoever will listen that for two years now we’ve seen nothing but this kind of tenant here and at [L&L's] 195 Broadway,” Mr. Berkey said. “We haven’t seen financial services or law firm tenants. It’s not a new phenomenon by any stretch.” Read More

By Jotham Sederstrom 1/10 7:00am

Postings

CO 1-8 Page 22

Fourth Quarter Promises, Annotated

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. Read More

By Karsten Strauss 1/09 7:45am

Midtown South

The Midtown South submarket of Manhattan may have peaked.

Midtown South Submarket May Have Peaked

With rents on a high and vacancy rates inching upward, the Midtown South commercial market may have reached its healthiest point.

Both Midtown and Midtown South – perhaps the tightest market in the country –experienced an increase in vacancy rates this past year, according to numbers released Monday by Cushman and Wakefield, rising to 10.3 Read More

By Karsten Strauss 12/19/12 7:30am

The Year in Review

year tech broke

2012: The Year Tech Invaded NYC Real Estate

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

By Robert Sammons 10/18/12 7:30am

Stat of the Week

ClassAVacancysubmarket

Tech, Advertising, Media, Info All Competing for Midtown South Space

44.6 percent—that’s the percentage of leasing transactions (by square footage) that were in the tech/advertising/media/information (TAMI) fields in Midtown South during the year to date.

The average size of those TAMI deals was rather small, at just over 26,000 square feet, and ranged from leases such as Havas, with 226,000 square feet, down to Speed Media, with just under 2,000 square feet. But we think TAMI has legs in Midtown South, due to the variety of firms taking space—it’s not just one particular segment of these creative fields. Read More

By Jotham Sederstrom 10/18/12 7:15am

Postings

Midtown South 3Q12 Leasing Activity.

Tech Wasn’t Only Sector to Lease in Midtown South in 3Q12

With all the talk about Midtown South’s incredibly shrinking vacancy rate, it’s easy to conclude that deals by a swarm of new-media companies, social applications and tech startups are at the heart of the market’s heralded rebound. But a closer look at third quarter leasing activity suggests that companies with long histories, like Estée Lauder, should take equal billing. Ken McCarthy, senior economist at Cushman & Wakefield, reviewed Midtown South’s third-quarter activity and explained why the market and its five submarkets performed so well in the last quarter and in the past 12 months. Read More

By Daniel Geiger 10/17/12 7:00am

Midtown South

Midtown South.

Computing Midtown South: Tech Is Booming, but for How Long?

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. Read More

By Carl Gaines 10/01/12 11:32am

Sales Beat

635 Sixth Avenue.

635, 641 Sixth Avenue Bought for $173 Million

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. Read More