Out and About on the Westside
The Newmark Grubb Knight Frank Westside/Times Square (W/TS) district has generally avoided the spotlight in recent quarters for several reasons, including both its relative steadfastness and the constant activity of the neighboring district to the east: Sixth Avenue/Rock Center. But that’s all changing. It should come as no surprise that a district that includes the flashiest area in Manhattan, Times Square, would grab some attention eventually.
In the first quarter, there were a couple of major blocks added to availability. When Conde Nast relocates in the not-too-distant future to 1 World Trade Center, 817,000 square feet will become vacant at 4 Times Square. Meanwhile, eight blocks north, another 415,000 square feet will require new tenancy at 1633 Broadway. In the first quarter, these two blocks were almost entirely responsible for the availability rate climbing to 10.8% for W/TS, from 8.1% in the fourth quarter. This is its highest rate since 11.0% was reached in the second quarter of 2012, prior to lease signings of Microsoft and eMarketer at 11 Times Square and Yahoo at 229 West 43rd Street. Currently, there are 12 buildings with at least 100,000 square feet of availability in W/TS, out of a total of 82 buildings tracked.
Meanwhile, the average asking rent remains quite competitive with other districts in Midtown, closing the first quarter at $66.17 per square foot. This is just above the figure for Grand Central, but significantly below that of Sixth Avenue/Rock Center, Upper Fifth/Plaza and Park Avenue.
Looking into Times Square’s famous crystal ball, it seems likely that at least one additional major block, 60 Columbus Circle, on the northern fringe of the district, will come to market in just a few years. Time Warner had signed a short-term lease-back at that location for about 1 million square feet prior to its relocation to 30 Hudson Yards. If that block was included today, the availability rate would rise to 13.2% from the current 10.8%, its highest since reaching 13.6% in the fourth quarter of 2009, a few months after the official end of the recession.
Most of these available big blocks have one thing in common: location, location, location. Thus the flash (and convenience) of Westside/Times Square will no doubt continue to benefit the district.