Small but Feisty: Tiny Submarkets With Big Heart



Typically, I write about big-picture items, such as the overall New York City economy or the major Manhattan submarkets. I have managed to work in a few tidbits on areas such as Dumbo, but that has been the exception rather than the rule.

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This week, though, I’ve decided to focus on Newmark Grubb Knight Frank’s two smallest submarkets in Manhattan (as measured by inventory): the Village and Lower Sixth Avenue.

Why focus on two submarkets, you ask? Primarily because they have a lot in common. For example, both are located in Midtown South and in fact adjoin one another, and they are almost equal in size (square footage-wise). Plus, I thought it might be fun to pit one against the other, because, this being Manhattan, even these “cozy” neighborhoods have a lot going on!

First, the basics:

 

VILLAGE

LOWER SIXTH AVENUE

Total Square Feet

3.6 million

3.7 million

Number of Buildings

20

24

Current Availability

5.3 %

6.2 %

Availability 1 Year Ago

10.1 %

10.3 %

Current Asking Rent

$62.35/sf

$55.00/sf

Asking Rent 1 Year Ago

$55.33/sf

$55.26/sf

Largest Building

770 Broadway—1.1 million sq. ft.

620 Ave of the Americas—700,000 sq. ft.

Class A Buildings

3

1

The tech/new media sector has been very active throughout Midtown South recently, and these areas are no exception, pushing the availability rate lower in both submarkets. In the Village, Facebook took a healthy chunk of space at 770 Broadway, while for Lower Sixth Avenue it was Mediaocean signing a large transaction at 620 Avenue of the Americas.

These NGKF submarkets, however, aren’t identical twins. First, the Village covers a lot of territory, stretching from river to river (and almost encircling another submarket). Lower Sixth Avenue, meanwhile, is quite a compact submarket, literally running the length of Sixth Avenue (aka Avenue of the Americas) from 14th to 23rd Streets.

And finally there is this: The Village is imminently going to be the proud submarket “parent” of a healthy 400,000-square-foot shiny glass building, 51 Astor Place. The property has yet to land a tenant, but have no fear—one will arrive eventually. And it will certainly change the face of the (primarily) brick-and-mortar office stock. At least temporarily, it will add quite a bit of space, causing its current 5.3 percent availability figure to jump to 13.9 percent, which will be the highest rate among the 9 Midtown South submarkets.

Small but feisty indeed.