Leases  ·  Office

Verizon Plans to Sublease Unoccupied Essex Crossing Office Space

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There’s an office retreat on the horizon for Verizon as the telecommunications firm plans to sublease the 143,000 square feet at Essex Crossing it signed on for in October 2021.

Verizon has employed the services of Howard Fiddle of CBRE (CBRE) to find a subtenant for the space, which Verizon never built out or occupied, The Real Deal first reported

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At the time of the deal, Verizon signed a 20-year agreement for floors three through five in the newly built development at 155 Delancey Street in the Lower East Side. Essex Crossing was built by Taconic Partners, L+M Development Partners, BFC Partners, Goldman Sachs (GS)Urban Investment Group and The Prusik Group.

Verizon took the Essex Crossing space to relocate staff from its longtime home at The Verizon Building at 140 West Street, while keeping 565,800 square feet at 140 West for switching equipment, the New York Post previously reported.

It’s unclear why Verizon seems to be canceling its plans. Spokespeople from Essex Crossing, Verizon and CBRE did not respond to requests for comment.

Verizon dumping 143,000 square feet on Manhattan’s sublease market adds to the office market’s woes. Since the pandemic, the borough has been dealing with a glut of sublease space, which reached a record level of availability in the first quarter of 2023. 

While the sublet availability waned from the highs of January, it was still up 3.9 percent year-over-year in the third quarter, according to a report from Colliers

Meanwhile, more workers have been coming back to the office. An analysis of 350 Manhattan office buildings by the Real Estate Board of New York (REBNY) showed that return numbers are increasing, with Class A properties seeing an average visitation rate of 70 percent of pre-pandemic levels in October.

By location, visitations to Midtown South reached 76 percent, Midtown saw 71 percent, and Downtown saw only a 60 percent improvement over pre-pandemic numbers in October, according to REBNY.

Mark Hallum can be reached at mhallum@commercialobserver.com.