Midtown’s best buildings are signed. Now, even the second and third rate offices disappear from the market, as they become 5.5 million square feet of working space for residential use. But there is a great winner of The Crunch: Lower Manhattan.
“Midtown has become incredibly adjusted for great tenants seeking quality space,” said Jonathan Mazur, Newmark Research Analyst. “The city center has always been the most profitable market and has the highest opportunity for the great tenants to rent.”
There is a lot of room for the other way around because last year, the city center had the lowest amount of rent ever registered. “Those of us on the market are now attending and participate in robust activity,” said John Wheeler, from JLL, emphasizing that the current channel for both sublores and direct offers are huge. “From twelve months, you will see many stories about leases and ask,” Where did this come from? “,
Jane Street Capital, for example, accumulated 983,791 square feet in Brookfield Place with its expansion of 600,000 square feet on 250 Vesey St. This caused the owners of the building, Brookfield Asset Management, as well as other tenants, moved off the road. The university for one will move within the complex to 41,000 square feet at 225 Liberty.
In 1 world trade, two tenants almost double the size.
“We became the largest tami [technology, advertising, media and information] The community of all New York and begins to see a higher percentage of finance agreements and for the first time, have two outstanding leases with two law firms, ” said Eric Engelhardt, Durrst, who owns and manages the property for New York and New Jersey Port Authority.
A lessee takes his first office in the city and another moves from the area. “Opinions and amenities attract them,” said Engelhardt.
In addition, Axsome Therapeutics was at an additional 48,000 square meters of Condé nast, taking its occupation to 96,000 square feet, while Bny Mellon negotiates a four-year-old subsequent for 200,000 square feet to use it while renewing its headquarters at 240 Greenwich St.
In April, CBR reported 127,000 square feet of lease with the current of 1.55 million square feet, 122% more than in 2024. The average calling for rent of $ 57.39 per foot are an offer compared to Midtown $ 82.90. Keep in mind that even the city center, the class rentals A will incorporate the high $ 80 per foot or even triple digits for very high flats in the world’s world.
)The Manhattan market generally has reduced almost 70% of the sub -buried space added during the pandemic … it has absorbed a little. “”
Jonathan Mazur, Newmark Research Analyst
American Express continues to negotiate with Larry Silverstein to anchor a new shopping center 2, but everyone says, “It’s complicated.”
Family sources with the conversations say that Amex would take the lower flats of a tower of 2.5 million to 3 million square feet and would include many comforts for their employees. But the financial firm continues to find out how much space will need when it opens for about five or more from now on.
Silverstein, who fulfilled May 30, also has to discover the amount of square footage he needs to lease others and which income, which could be $ 150 per foot or more against current rents in the center of the center of the 80’s.
For tax reasons, Amex could sell its current excavations and buy its part of the new tower, similar to that related to its Hudson Yards offices, which created a strong financial model for lenders.
Once they reach the Nitty-Gritty numbers, the American Express Board will have to approve the agreement.
Meanwhile, recent offers from the city center include a 225 Liberty St. Masterworks movement. A 1 World Trade Center of Brookfield in a subsequent 37,000 square feet of network capital. Uber also expanded up to 351,000 square feet leasing 44,000 square feet of Silverstein properties at 3 World Trade Center.
The extension of the tenants and the absorption of sodas help the global market. Stripe, based in San Francisco, opened its first New York office in 2019 to 199 Water St. And a year ago, it expanded and moved to 28 Liberty, where it was 147,000 square feet. When other tenants faced the negotiations to assume their soils, Wheeler said they “touched the pause button.”
“We now see that the subllanic people recover the space for their own needs,” Wheeler said.
In less than two years, Newmark’s statistics show that the sublores available in the center have fallen by 35%, dropping from 6.6 million square feet to the second quarter from 2023 to 4.3 million square feet at the end of April.
“Not all tenants are a Hudson Yards or a Park Avenue tenant and those who are most sensitive to the price or looking for an economic transaction look. “”
Eric Engelhardt de Durrst
)The Manhattan market generally has reduced almost 70% of the subsidiary space added during the pandemic, “said Newmark’s Mazur.” It has absorbed quite a bit. ”
The newly developed 107 Greenwich will be soon rented of 96%. Although most offers have been single, there are now two plants.
On the 18th floor, which has a landscaped outdoor terrace, the owner Trinity created a state-of-the-art flat that Wheeler says he was “crucial” for tenants who decided to lease. Now there are conference rooms, a complete kitchen and a coffee/wine bar. As another more unusual advantage, the gym and basketball court on the lower floor of the building in Trinity Commons and that are used for the school’s school programming is open to tenants from 6 to 9 in the morning
Although there are leases in class A space, much of the moment comes from musical chairs, that is, tenants forced to move due to conversions or update on a flight to the quality of another low Manhattan space.
The St. Of 60 million square feet of 1.6 million square feet of 60 million square feet, it is also taking off the tenants. Sullivan and Cromwell White Shoe law firm weighs a movement of 125 Broad St. And look for 500,000 square feet, while Moody at 7 World Trade Center is looking for 300,000 square feet and AON, now at 1 Liberty it is after 175,000 square feet, but they could all be renewed.
The runners say that Water Street has always been a “value game” for office tenants and that there are currently numerous rental offers pending at $ 50 and $ 60 per foot.
Tenants like the city center do not usually happen in other parts of the city. S&P Global, a lessee of 350,000 square feet at 55 Water St. Window bought a relocation to Midtown last year, but finally decided to stay in its place.
As the planned buildings for the conversion buy or hit, their tenants move elsewhere. This has resulted in several office tenants of more than 100,000 square feet to negotiate an exit (being paid) and seek new excavations.
“They are pragmatic and take a fall as part of their lease and enter a very attractive market,” said Wheeler. “There are not many leases that have a demolition clause, so most are unique negotiations with tenants.”
Therefore, these conversions cause “immediate positive absorption” as the remaining tenants move, Engelhardt said: “They are moving and moving close assets that may have been fighting. But it is a absorption from bottom to bottom.”
Vanbarton is turning 180 Water St. Like 77 Water who made engineering Arrup expand to 99,418 square feet on a transfer to 140 Broadway.
Among the buildings that are being turned are the wall of 111 square feet of 1.2 million square feet and the lower portion of 80,000 square feet of 80 pines that was previously vacant for AIG.
When the office buildings are rented from 50% to 60%, Spencer Levine de Ral said that owners do not continue to lease because they think that the grass can be greener on the other side.
“Everyone thinks their building can be converted, but in reality it is only a small number.”
Brian Waterman from Newmark
But when selling them to a converter, Levine said that there is still a “disconnection between the seller and his expectations.”
“Everyone thinks their building can be converted, but in reality it is only a small number,” he continued. “The amount of money needed to make them livable is unsustainable.”
Very often, he said, the bases of the building do not become “great experiences of life”. One thing is to turn, he added, and another to create a project where people want to live.
To see more rental speed in the city center, Brian Waterman, of Newmark, said that the rest of the market must be tightened.
“They go there out of necessity, unwittingly,” Waterman explained.
But Engelhardt is more optimistic. Because the city’s economic base is so wide, “not all tenants are a Hudson garden or a Park Avenue tenant,” he said, “and those who are more sensitive to the price or seek an economic transaction look at the city center. “”
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