The entire area of Manhattan south of 60th Street is considered by area city planners to be a single, multi-node central business district, although there are residential sections within it. Downtown is the original center of the region, and reached its peak before WWII. Subsequently, Midtown has become the primary center, with office development spreading north and west from Grand Central Station after the middle of the 20th Century. Midtown South is an area of lower buildings (by NYC standards) located south of 30th Street.
- The 36-million-square-foot Midtown West submarket has a vacancy rate of 13.2% for the second quarter of 2012 Reis reports, the highest among seven submarkets, and an average asking rent of $62.15 psf.
- The vacancy rate edged down 10 basis points during the quarter, and is 130 lower than a year earlier. Both the average asking rent and the average effective rent increased 0.4% during the period, the latter to $51.22 psf. The year-over-year increases were 3.2% asking and 4.3% effective.
- The 1-million-square-foot 250 West 55th Street remains the largest building under construction away from the World Trade Center site. It broke ground in October 2011 for completion in early 2014.
- Studley, Inc. reports an 11.2% availability rate, and a $72.18 psf average asking rent, for its Westside I submarket.
- Viacom International renewed for and expanded into 1.4 million square feet at 1515 Broadway, according to Cushman & Wakefield.
- “Hines has reached a deal with JPMorgan Chase & Co. to get financing for Hines’ planned 470,000-square-foot office tower on Sixth Avenue, overlooking Bryant Park,” according to Crain’s New York Business. “Any loan would be quite an accomplishment for Houston-based Hines, or any other developer, because lenders have been loathe to open the purse strings for speculative office towers” but Hines doesn’t need as much pre-leasing as the larger buildings that have been proposed, according to this source. Reis expects 7 Bryant Park at 6th Avenue and 40th Street to break ground in October.
- In the 34.6-million-square-foot Midtown South submarket, Reis reports the vacancy rate is 6.7%, the lowest among the submarkets and an average asking rent of $44.00 psf.
- The vacancy rate decreased 10 basis points in the second quarter and is down 20 from a year earlier. The average asking rent increased 0.4% during the quarter, and the average effective rent rose 0.3% to $35.88 psf. The year-over-year increases are 3.9% asking and 4.6% effective.
- “The strongest growth was in Midtown South where asking rents are up 10.8% from a year ago,” according to Cushman & Wakefield. This source put the vacancy rate at 6.1% asking average at $49.43 psf.
- Studley, Inc. reports “Midtown South is in the midst of a bidding environment that is reminiscent of 1999 and 2000, reviving questions about a possible bubble.” However the leading lease in the area, according to this source, was not a tech company. NYU took 125,000 square feet at 105 E. 17th Street. “Midtown South has clearly matured in the past decade,” this source concludes.
- “The office market in New York is recovering fastest in districts where the city has made improvements to streets and public spaces,” according to a study by J. Liff Co cited by Crain’s. “Since the recession, the meatpacking district, between Ninth Avenue and the Hudson River, and the flatiron district near Broadway have seen the biggest upticks in rents and greatest decreases in availability rates,” and those areas have also experienced upgrades to streets, including new bike lanes and expanded pedestrian spaces.”
- For the 26.3-million-square-foot Penn Station submarket, Reis reports a vacancy rate of 8.1% and an average asking rent of $41.39 psf, the second lowest according to Reis.
- The vacancy rate increased 40 basis points during the quarter, and is up 30 from a year earlier. The average asking rent increased 1.0% and the average effective rent rose 0.8% to $33.16 psf during quarter. The year-over-year gains are 4.7% and 5.3%, respectively.
- In its Westside II submarket, Studley, Inc. reports an availability rate of 10.3% and an asking rent of $51.96 psf.
- Reis expects the 1.7-million-square-foot Hudson Yard South office building at 10th Avenue and 30th Street will break ground in October. The Two Manhattan West building at 9th Avenue and 33rd Street, also at 1.7 million square feet, is expected to follow in January.
- The 55.4-million-square-foot Plaza submarket, at the southern edge of Central Park, is the most expensive area in the city according to Reis, with an average asking rent of $84.79 psf. The average asking rent increased 0.8% in the second quarter, and the average effective rent rose 0.9% to $69.28 psf. The year-over-year gains are 5.3% and 6.6%, respectively.
- The Plaza District vacancy rate is 11.3%, down 40 basis points for the quarter and 160 from a year earlier. Second quarter net absorption was 206,000 square feet, bringing the year to date total to plus 411,000. The market wide total was plus 536,000 square feet for the half-year.
- Studley, Inc. reports an availability rate of 11.1% and an asking rent of $70.95 psf for its Plaza I submarket. In its Plaza II submarket, the firm reports an availability rate of 11.0% and an asking rent of $70.25 psf.
- The largest lease of the quarter, according to this source, was a renewal for 484,040 square feet by Citigroup at 601 Lexington Avenue.
- “General Motors Co. is preparing to finally move the last of its executives out of the famed Fifth Avenue tower that still bares the automaker’s name despite its long-dwindling presence in the tower it sold years ago,” according to Crain’s. “GM is subleasing the last three remaining floors it occupies at 767 Fifth Ave. between East 58th and East 59th streets, which total around 114,000 square feet.” The automaker sold the 1968-built building in 1982 for $500 million. “The company’s contractual naming rights for the property expired in 2010, but even current owner Boston Properties still calls it the GM Building.”
- The 113-million-square-foot Grand Central submarket is Manhattan’s largest, according to Reis. This submarket has a vacancy rate of 10.2%, and an average asking rent of $64.00 psf, second highest among the submarkets.
- The vacancy rate fell 30 basis points in the second quarter on 313,000 square feet of net absorption, bringing the year-to-date total to plus 664,000 square feet. The average asking rent increased 0.6% and the average effective rent rose 0.7% to $52.89 psf during the second quarter. The year-over-year gains were 3.7% and 4.8%.
- Studley, Inc. reports an availability rate of 13.9% and an asking rent of $59.92 psf for its Grand Central I submarket. In its Grand Central II submarket, the firm reports an availability of 7.4% and an asking rent of $42.53 psf.
- The largest non-renewal lease of the quarter according to this source was for 82,300 square feet at 250 Park Avenue by Pernod Richard. At 245 Park Avenue, Angelo Gordon & Co. leased 74,800 square feet.
- In the 66-million-square-foot Downtown submarket, Reis reports the vacancy rate is 11.6%, second highest among the submarkets, and the average asking rent is $42.69 psf.
- The vacancy rate fell 30 basis points during the quarter, but is still up 60 from a year earlier. The average asking rent increased 1.3% during the quarter, while the average effective rent rose 1.4% to $34.77 psf. The year-over-year gains are 2.7% and 3.6%, respectively.
- Cushman & Wakefield reports a vacancy rate of 8.9% and an overall weighted average gross rental rate of $40.06 psf for Downtown, including the Reis South Broadway submarket (below).
- Morgan Stanley renewed for 1.16 million square feet at One New York Plaza, according to this source.
- “American International Group Inc., the insurer rescued by U.S. taxpayers, is weighing a move from its headquarters at 180 Maiden Lane in Manhattan,” according to Bloomberg News. The approximately 2,000 employees there may be transferred to other locations as part of a cost-saving consolidation…An AIG-owned property at 175 Water St., within walking distance from Maiden Lane, is among the buildings that may absorb the workers.” The firm’s worldwide employment has fallen by half in recent years; the firm leases 800,000 square feet at 180 Maiden Lane. “The Maiden Lane property became AIG’s principal office after the company struck a deal in 2009 to sell its previous headquarters at 70 Pine St. to Kumho Investment Bank.”
- In the adjacent 20.6-million-square-foot South Broadway submarket, which includes Tribeca and the Civic Center, Reis reports a vacancy rate of 6.8%, down 20 basis points during the second quarter and second lowest among the submarkets.
- The average asking rent is $41.17 psf, up 0.2% but the lowest among the submarkets. The average effective rent increased 0.3% to $32.70 psf.
- According to Studley, Inc., JC Penney outbid Restoration Hardware, Armani, Facebook and Droga5 to lease the entire 130,000-square-foot building at 200 Lafayette Street. JC Penney had moved its headquarters out of New York City to Texas in the deep early 1990s recession.
- Havas leased 225,500 square feet at 200 Hudson Street, according to this source, while the City of New York Law Department renewed for 372,520 square feet at 100 Church Street.
- The 430,000-square-foot 51 Astor Place broke ground in November 2011, with construction expected to finish in early 2013.