Midtown South’s Seven Big Blocks
Richard Persichetti March 25, 2014, 7 a.m.
There are many different pop culture references for the number seven. My two favorites are Se7en, which referred to the seven deadly sins, and an episode of Seinfeld titled “The Seven,” in which George Costanza revealed he wanted to name his firstborn child Seven, after Mickey Mantle’s jersey number. For Midtown South, the number seven is currently both lucky and unlucky. The lucky seven is for Midtown South landlords, as it is the tightest office market in Manhattan, with the lowest availability rate: 7.7 percent. But, of course, this is unlucky for large tenants who want to lease space in the area and only have seven options available for contiguous space greater than 100,000 square feet.
That’s the smallest number of available big-block space options for Midtown South in nearly seven years. Comparing this to the number of available blocks going back to March of each of the last six years, there was an average of 14 space options on the market. The Madison Square/Park Avenue South submarket offers the most big-block opportunities, with three, while Chelsea/Meatpacking District and Soho/Noho/Village have no blocks greater than 100,000 square feet currently available.
These seven blocks of space total 983,617 square feet, representing only 15 percent of the Midtown South available supply. Of these seven blocks, five are available on a direct basis, while two are subleases. The average asking rent for the five direct blocks is $74.24 per square foot—slightly above the Class A average asking rent for Midtown South of $73.23. The two subleases are being offered at a 36 percent discount, with the average asking rent just $47.39 per square foot.
Looking at the demand side of the equation shows that 11 leases greater than 100,000 square feet have been signed in the past 15 months in Midtown South. And this week’s stat would not be complete if I did not point out that seven of these leases were new transactions. Of these seven new leases, four occurred this year.
So whether you think “seven” is better as a name, number or movie, it seems to be doing well for Midtown South.