Times Square South Saw Six 100K+ Leases
In the spirit of March Madness, taking a look at five Midtown submarkets and who has seen the best action
Last Stat of the Week, during part one of the Midtown Madness Tournament, the Madison/Fifth Avenue submarket got knocked out and failed to repeat as champion, as all five matchups were upset victories by underdog submarkets. Murray Hill, the smallest Midtown submarket, recorded two upsets on its way into the final four, beating both the East Side/U.N. in the play-in round and the number one-seeded Grand Central during the first round. With the final four submarkets all recording upsets this year, let’s determine which underdog submarket will be crowned as the 2018 Midtown Madness Champion.
The second round will be decided by the largest year-over-year increase in overall average Class A asking rents through February. In the East region, Murray Hill continues its dominance with an 11 percent increase in asking rents over the last 12 months to $69.68 per square foot. The bulk of the increase was due to a jump in sublease pricing, which was primarily attributed to a higher-priced sublease space hitting the market at 2 Park Avenue. This increase in Class A asking rents was too steep for the higher-seeded Park Avenue to keep up with, where rents actually decreased 0.5 percent to $89.83 per square foot.
In the West region, the number four-seeded Penn Station submarket stumbles with a decline in Class A asking rents, down 13.9 percent to $67.02 per square foot. This significant asking rent drop is not due to a weakening submarkets—Penn Station remains in high demand, which leads to better-quality, higher-priced space leasing quickly and driving asking rents down. This statistical anomaly allows for Times Square South to score a layup and reach the finals, as Class A asking rents increased 0.7 percent to $75.98 per square foot.
For the first time ever, the fifth-seeded Murray Hill made it to the finals from the East region, and will try to upset the third-seeded Times Square South submarket from the West region. The finals will be decided by the number of new leases signed greater than 50,000 square feet over the last 12 months. Times Square South recorded seven leases of this size, led by six leases greater than 100,000 square feet. Murray Hill’s Cinderella story comes to an end during the finals with only one new lease completed in the last 12 months greater than 50,000 square feet. This results in Times Square South winning the 2018 Midtown Madness Tournament!