It’s Now Time to Take Downtown Seriously
David Greene Jan. 9, 2014, 7 a.m.
It comes as no surprise to us that positive numbers continue to be announced day after day, week after week. According to the University of Michigan study often quoted by Bloomberg News, the consumer confidence index is now at 82.5 when only 40 days ago it was at 73.2. The index is at its highest year end point since 2007. The stock market broad gauge was up 29.6% and the Dow Jones Average up 26.5%; both indices had very big years. Companies doing business in New York City put another 110,000 people to work in 2013. And though this article was written too early to tally the results, I would not be surprised to see that 27+ million square feet was leased in Manhattan in 2013. Notwithstanding the politicians in Washington DC, business got back to work in 2013.
More than 54 million visitors came to New York City in 2013, continuing a remarkable trend and putting all those dollars to work here in New York. As a native New Yorker, I like to walk this great city of ours. I walk through Times Square twice a day heading in to work and back home at night. I feel those 54 million visitors every day when I find it easier and faster to walk in the street rather than on the sidewalk as I cross through the center of the world.
A closer look at the office and retail market is continued evidence of a rising market. The Flatiron District and the Park Avenue South markets are still sizzling with practically no space available direct from a landlord in the 2,000- to 10,000-square-foot range and $50 and $60 rents the norm. If our recent 121,000-square-foot deal with Scripps (HGTV, Food Network and others), our largest tenant at 1180 Avenue of the Americas, is any indication, the Avenue of the Americas market is slowly beginning to improve. In a nod towards the Hudson Yards on the Far Westside of Manhattan, a look at the Department of City Planning page on the NYC.Gov website informs us that based on the 2000 census “it is anticipated that there will be the need to accommodate over 440,000 new workers, requiring 111 million square feet of new space by 2025…The problem is that there are few sites remaining in Midtown to accommodate new office buildings. Recent studies indicate that at most, there is perhaps room to accommodate only 20 million square feet in Midtown.” There is plenty of excitement about the Hudson Yards. Cranes are in the sky and there are magnificent “forward-thinking” plans and beautiful renderings that will no doubt result in a gorgeous and trendy part of town, but little is in place at the present time.
Thirty five of our brokers recently toured 4 World Trade Center and came away impressed not only with the structure and layouts but also with appreciation for Larry Silverstein, who continues to look forward. Mr. Silverstein could sit back and we’d all look at his career and say “wow” but what is even more impressive is that he seems to always be looking for his next great project. More than anything the full tour was confirmation that Downtown Manhattan will become the next great destination. Sure, a few years ago, when the Conde Nast deal was concluded, a number of brokers proclaimed Downtown as the new destination, but one deal does not a destination make. Rather it is a groundswell of many events. And once the magnificent Calatrava transportation hub opens next year, bringing 11 subway lines and PATH trains to the area, the location will give its uptown neighborhoods a run for many tenants in the market.