March Midtown Madness
In the spirit of the N.C.A.A. basketball tournament, we created the first ever Midtown Madness Elite Eight bracket. The nine Midtown submarkets are split into East and West regions, with the seeding based on the submarkets’ total size. Unfortunately, the West region has five submarkets, and since Penn Plaza/Hudson Yards is the smallest, it did not make the tournament.
The first round is decided by the largest 12-month basis-point drop in availability. In the West, the No. 1 seed easily disposes of the No. 4 seed, as Avenue of the Americas/Rock Center availability is down 300 basis points to 11.2 percent compared to Times Square, where availability is up 250 basis points to 10.5 percent. The No. 2 seed had little trouble with the No. 3 seed as the Fashion District had the best round-one showing, with a 350-basis-point drop in availability to 7.9 percent, compared to Midtown West/Columbus Circle’s 180-basis-point decline to 7.5 percent.
In the East, the No. 4 seed upset the No. 1 seed in the closest contest of the first round. The East Side edged out Grand Central with a 190-basis-point drop in availability to 7.0 percent, compared to a 160-basis-point decline to 13.7 percent. In the second upset of the tournament, the No. 3 seeded Fifth/Madison’s 80-basis-point decline to 14.1 percent trumped the No. 2 seeded Park Avenue’s 90-basis-point-increase to 11.1 percent.
The second round is decided by the largest increase in overall asking rents over the past year. The upsets continue as the Fashion District’s 11.4 percent increase to $52.26 per square foot destroys the Avenue of the Americas/Rock Center’s 0.9 percent decline to $78.09. Meanwhile, Fifth/Madison’s 13.1 percent increase to $104.80 per square foot decimates the 2.4 percent increase to $64.17 a foot on the East Side.
The finals are decided by most leasing activity as a percentage of the total market size. In the Fashion District, 2.205 million square feet has been leased since the first quarter 2013, which equals 6.6 percent of the submarket’s inventory. In the Fifth/Madison submarket, 2.284 million square feet was leased, accounting for 9.1 percent of the submarket’s inventory.
So there you have it, not only is Fifth/Madison the most expensive submarket in the nation, it is also the first Midtown Madness champion.