Midtown Wears Crown as Nation’s Priciest Market


A long list of attractions draws cash from all corners of the world to the money pit that is Midtown Manhattan, making it among the most expensive markets in the world.

Midtown’s continued popularity comes thanks to a tourism boom and high demand for commercial real estate that have blossomed post-recession, creating a melting pot of cultures—and cash.

“It’s like a small city within the city,” said Adelaide Polsinelli, a senior director at Eastern Consolidated. Read More


No End in Sight for Midtown Hotel Boom

Marriott Marquis, Times Square (Credit: Marriott)

While not on the scale of the hotel boom that captured the city in the late 1980s, significant development in Midtown is keeping pace with continued growth in tourism.

Occupancy rates in the city remain among the highest in the nation, bolstered by Midtown and Times Square, even with a significant uptick in product (i.e. the number of hotel rooms)—and, remarkably, despite the fact that hotels continue to charge the highest room rates in the country.

“Hotels are on fire,” said Alan Miller, an executive managing director at Eastern Consolidated. “I can’t see a location more vibrant than Times Square, because so many people visit here.” Read More


What’s in a Name: Garment District, Chelsea North or Times Square South?

Times Square South Boundaries.

It’s been commonly known as the Garment District, but with the recent surge of tech industries moving into the area, some are calling Times Square South by a new name: Chelsea North. Confused?

“The market has changed dramatically,” said Diana Gaines, a senior director at Cushman & Wakefield, of Times Square South. “The area called Times Square South has traditionally been known as the Garment Center. In the last few years, this has become less and less the norm.” Read More


Migration to Hudson Yards Predicted

West Side Boundaries.

The West Side of Midtown has increased its presence in the commercial real estate market within the past 20 years. The market now boasts a vacancy rate below 10 percent across all assets.

“To understand this market, it’s important to view it in the context of the history of the last 25 years,” explained Mitch Arkin, an executive director at Cushman & Wakefield. “In the ’80s, the market started pushing west with the development of Carnegie Hall Tower, the Equitable Building, 787 Seventh Avenue, followed by 1585 Broadway, 1540 Broadway, 750 Seventh Avenue, Worldwide Plaza, 1745 Broadway [and] Metropolitan Tower. Those buildings all brought Eighth Avenue and Broadway north of Times Square into Midtown.” Read More


Leasing Sluggish Along Sixth Avenue in Rockefeller Center Submarket

Rockefeller Center Boundaries.

Built by the Rockefeller family in the 1930s, Rockefeller Center is one of the largest commercial real estate developments to be built in the past century. Initially spanning approximately two dozen buildings, 22 acres and over 8,000,000 square feet, the district has further expanded in recent years to include a few dozen additional buildings along the Sixth Avenue corridor.

“There has also been a significant slowdown of leasing along the Sixth Avenue corridor, particularly Class A leasing, where leasing in the first half of 2012 was about half the long-term average,” said Melissa Bazar, an executive director at Cushman & Wakefield. “Since the Sixth Avenue corridor is dominated by large corporate users and financial firms, we expect leasing to remain sluggish through the balance of 2012, below the long-term average.”

Inventory has increased from 9.3 percent to 10.5 percent this past year, according to Cushman & Wakefield’s third-quarter report. Read More


Google’s Presence in Penn Plaza Draws New Media and Advertising Agencies

Penn Plaza Boundaries.

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. Read More


L&L Holdings’ David Levinson on New 425 Park Avenue Architectual Designs

Park Avenue Boundaries.

Lord Norman Foster this month won the contest to design the first new office tower in almost 50 years on Park Avenue, beating three other finalists for the opportunity to make a mark on the row of 30 Class A buildings in the submarket, which already boasts two of the city’s most famous modernist classics.

L&L Holding Co. late last month chose Foster + Partners’ design for an illuminated 41-story tower at 425 Park Avenue, a few blocks north of the Seagram Building and Lever House, 1950s buildings that helped establish the International Style of glass and steel construction. Foster’s tapered steel-frame tower allows for three gradated tiers of column-free floors, separated by tree-lined terraces where employees will take breaks and exchange ideas, as well as a ground-level public plaza. Read More


Among Developers, City Midtown Zoning Push Draws Fans, Foes

Grand Central Boundaries.

Mayor Michael Bloomberg’s plan to spur development in the Grand Central area, Manhattan’s biggest office submarket with almost 44 million square feet of inventory, is winning mixed praise from real estate executives, who say New York may be at risk of losing its preeminence over such business hubs as London, Hong Kong, Tokyo and Shanghai.

“I think Mayor Bloomberg has this right,” said Stuart Eisenkraft, vice chairman at CBRE and co-chairman of the firm’s global cities practice. “It’s sort of a no-brainer the global economy is here and it’s here to stay.” Developers in Asia, he said, “don’t have the challenge of site logistics or governance that prevents them from building magnificent Class A buildings.”

The new Midtown East district would loosen restrictions in a 78-block area between Fifth and Second Avenues and East 57th and East 39th Streets, where buildings are more than 70 years old on average and have low ceilings and interior columns that are undesirable to Class A tenants, the Department of City Planning said in an overview. Most of the new development would be focused on the area around Grand Central Terminal, because it has the best transportation access and largest concentration of aging office stock, according to the department’s Midtown East study.

Some urban planners, community boards and City Council members have expressed concern that the addition of towers that may be taller than the 77-story Chrysler Building would worsen crowding, The New York Times reported.

Read More


Empire State Building Tenant Roster Cut to Third of Size Since 2006: Malkin

Murray Hill Boundaries.

The Empire State Building is becoming a more exclusive address.

The tenant roster in the iconic 81-year-old skyscraper has been cut to 171 companies from more than 600 in 2006, before Malkin Holdings took over supervision of the property. The average rent has increased to $42.10 a square foot from about $26. The building, which is among the few notable commercial assets in Murray Hill, is approximately 20 percent vacant, partly because Malkin is keeping space off the market as it looks to assemble offices suited to larger users. Read More


Leasing Activity Falls 34% on East Side

East Side Boundaries.

The East Side market got a much-needed shot in the arm earlier this year when Citigroup Inc. decided to remain in its 500,000-square-foot space at 601 Lexington Avenue.

“Citi renewed its commitment,” said Cynthia Wasserberger, a managing director at Jones Lang LaSalle who was among the brokers representing landlord Boston Properties. The banking conglomerate, which had signaled during the downturn that it might divest itself of the offices, instead “chose to let other space lapse,” Ms. Wasserberger added.

The transaction helped stabilize a submarket where the vacancy rate jumped 2.3 percent to 10.2 percent in the third quarter from a year earlier, according to Cushman & Wakefield analysts. Read More


The Incredible Shrinking Tenant


Earlier this year, approximately 150,000 square feet opened at the Midtown office tower 399 Park Avenue when the law firm WilmerHale, a tenant in the building, left to relocate to Lower Manhattan.

The property, a 1.75-million-square-foot skyscraper owned by the large commercial owner Boston Properties, is home to the global headquarters of Citibank and is widely considered one of the finest office buildings along Park Avenue, an exclusive and highly desirable corridor in Midtown.

Boston Properties had found takers for the building even in the worst of times, filling the few hundred thousand square feet that suddenly became available in 2008 when Lehman Brothers, a former tenant, collapsed and sparked the financial crisis.

Fast-forward to 2012, a market several years removed from the depths of the recession, and this time around, Boston Properties wasn’t taking any chances. According to the leasing agent at the property, Peter Turchin, an executive at the real estate services firm CBRE, Boston Properties quickly switched to the leasing strategy du jour: finding takers for the space one floor at a time rather than waiting for one big user to fill a large portion or all of the space. Read More