A Tale of Two Avenue of Americas
The Avenue of the Americas/Rockefeller Center submarket has been performing well over the past eight months. After availability peaked at 14.2 percent in March of this year, more than 1 million square feet of positive absorption was posted, and the availability rate dropped to 11.9 percent through November. Overall asking rents are up only 1 percent since the end of 2012, to $77.98 per square foot.
If we focus only on buildings within the submarket with an Avenue of the Americas address (plus 1 Bryant Park), the data tells a whole other story. Together, these 30 buildings have a 12.8 percent availability rate with an overall average asking rent of $80.69 per square foot. However, when I worked on Avenue of the Americas, I remember a distinct feeling that the avenue had an invisible border at 48th Street. With that in mind, I split the avenue into a lower and upper corridor with 48th Street as the divide, and the results are quite telling. There is a 720-basis-point difference in availability between the north and south corridors.
Lower Avenue of the Americas, from 39th to 48th Streets, is performing well from an available supply standpoint. The availability rate for this area is a tight 8.9 percent with a value-driven average asking rent of $63.85 per square foot. The low rents coupled with its proximity to Bryant Park and the 42nd Street retail corridor makes these buildings along lower Avenue of the Americas a viable option for a plethora of industries.
On the other hand, upper Avenue of the Americas, from 48th to 59th Streets, is still struggling to recover, as its availability rate is 16.1 percent. Asking rents are much higher in this area, with an average of $80.18 per square foot. Aside from rents almost $20 per square foot higher than lower Avenue of the Americas, the average size for full-floor availabilities is currently 30,000 square feet, much higher than the 23,500-square-foot average on the lower portion of the avenue. On the positive side for upper Avenue of the Americas, market intel suggests a large law firm from the lower half is ready to jump the invisible border, which would narrow the gap in available supply.