Midtown South has been so hot lately it seemed just about ready to boil over. But April brought some relief in the form of additional blocks of space all across the submarket. In fact, each of the nine districts that make up Midtown South recorded an increase in their availability rate for the month.
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There has certainly been a lot of opining about the tightening of the Midtown South submarket and how asking rents there have been climbing sharply. At the same time, there have been questions regarding how Midtown average asking rents have managed to hold their own despite the apparent push by tenants to relocate farther south. Read More
William Elder has helped fuel immense growth as director of leasing and managing director of RXR Realty’s New York City platform. The firm now owns and operates what is soon to be nine million square feet of real estate as it expands its horizons outside of the city and continues to cultivate its existing Manhattan portfolio. Read More
Walk north on Broadway from Madison Square Park, and it’s hard to fathom that some of the highest retail rents in the city are paid just a few blocks away. Generic retailers with names like Fashion City, Master Clothing and Lucky Trading are more reminiscent of the Garment District to the north and Canal Street to the south than they are of big names on Fifth Avenue.
In the office space above those retailers, multiple tenants crowd single floors. It’s a far cry from the soaring ceilings and open layouts most commonly associated with tech-heavy Midtown South. Still, it’s a landlord’s market, and the buildings along the Broadway corridor are 95 percent leased and command rent in excess of $50 per square foot.
Stat of the Week
Although it’s still early in the year, net absorption for the Manhattan office market is looking healthy. Breaking the latest figures down by submarket and district level reveals a few cracks, but nothing terribly alarming and, most importantly, nothing unexpected.
Through February, net absorption for all classes of Manhattan office product totaled positive 2.45 million Read More
Available sublease space continues to decline and only accounts for 17.5 percent of overall Manhattan available space. At 8.2 million square feet, the available sublease supply has dwindled from 12 months ago when there were more than 10.5 million square feet on the market. This marks the lowest percentage of available space being offered on Read More
Stat of the Week
Robert Lapidus remembers Midtown South vividly. Not the red hot Midtown South of today, but the Midtown South from nearly a decade and a half ago, when his firm, L&L Holding Company, bought 150 Fifth Avenue. Rents in the building were $26 per square foot, the property was operating “like a hotel,” and the submarket Read More
The Madison Square/Park Avenue South submarket availability rate is 9.5 percent, and this submarket is outperforming the overall Manhattan market’s availability rate of 10.8 percent. However, with 2,528,505 square feet of available space, this submarket accounts for 37.9 percent of Midtown South’s available supply. With Midtown South availability tightening to its lowest level since 2006, Read More
With Midtown South pricing out tenants in search of smaller blocks of space, the Empire State Realty Trust has designed prebuilt office space on the 16th floor of 501 Seventh Avenue to harness the demand spilling over to other parts of the market.
Considering two types of prebuilds—office and creative—ESRT opted for creative, targeting media, tech and advertising firms. “We don’t cater to the garment industry anymore,” said Fred Posniak, senior vice president, frankly. Built for immediate occupancy, the four prebuilt spaces at 501 Seventh Avenue range in size from 2,641 square feet to 5,810 square feet.
Mr. Posniak spoke to The Commercial Observer last week about benefits and unique features offered on the 16th floor.
It is hard to believe that it was just a few years ago—specifically in 2007—when a perfect storm of positive events was taking place in the financial and real estate markets. The S&P 500 reached record highs, CMBS transactions grew to nearly $770 billion, the Blackstone Group completed its $39 billion purchase of Equity Office Properties Trust and then sold eight buildings in the Equity Office portfolio to Harry Macklowe for $7 billion, foreign investors were purchasing commercial real estate at record levels and everyone was purchasing residential condominiums. In short, happy days were here again.
The third quarter of 2013 is in the books, and it looks by most measures to have been a pretty average quarter. Leasing volumes were average, asking rents were, for the most part, flat, and vacancy rates drifted higher.
The biggest surprise in the statistics was in the Downtown market. While vacancy rose from second Read More
Stat of the Week
“I’ll be honest with you,” Gregg Weisser said. “It caught me by surprise.”
Mr. Weisser, the senior vice president and director of commercial real estate at the Moinian Group, was discussing the dramatic rise of Midtown South as a real estate, tech, media and fashion powerhouse. But he likens the fast-paced big-city success story to a leisurely drive upstate.
Stat of the Week
How tight is Midtown South? A simple answer to that question is the market is very tight and considered to be below equilibrium.
With an availability rate of 8.7 percent and asking rents at historical highs for both Class A and Class B space, the market is in high demand. Digging into the numbers further shows that 35.25 percent of Midtown South buildings are fully leased. That percentage may not seem like much, but compare that to Downtown’s 25 percent and Midtown’s 23 percent, and you will see that Midtown South is pretty significantly outperforming the other markets.
Design & Spec
Last week was the 12th anniversary of 9/11. These events affected everyone throughout the city but also had a significant impact on the city’s commercial real estate market. I remember gathering data and statistics on companies that had been temporarily and permanently displaced from their buildings downtown. Fast forward to today, when my research team is looking at the growing trend of tenants migrating into Lower Manhattan over the past 20 months.
Since January 2012, 94 companies moved from Midtown and Midtown South to Downtown, which accounts for 37 percent of the 5.6 million square feet of new leases signed during this time. Despite having the highest availability rate of the three major markets at 13.6 percent, Downtown has been in high demand. Of these 94 tenants, almost two-thirds of them were from the TAMI sector (37 percent) and professional services (26 percent) industries.
Each tenant has its own unique office space requirements, but some—social media and tech firms, for instance—share similar architectural “wish lists.”
For brokers, these common threads offer insight into how to help tenants hone in on the ideal space faster. For landlords and building owners, they provide valuable direction on how to attract the right Read More