February 2024

Two Recent Engagements

On two recent client engagements, the client's call came in after receiving an unsolicited proposal from their Landlord to extend their lease, even though there was 3+ years remaining on the term. For context, both clients were <10,000 Square Feet and occupied space in Class-B Midtown buildings > 80% occupied.

The Landlord’s proactive outreach to extend these leases at low rents well before the Tenant had an opportunity to think about moving (3+ years out from lease expiration) was unusual as Landlords are usually the most optimistic on how high rents will go.

However, the common motivator for these landlords was an impending opportunity to secure an extension on the building’s mortgage provided they had longer lease commitments from these tenants.

In addition to the already favorable market conditions for tenants, both of these clients unknowingly found themselves in a position with great leverage to extract an extremely appealing deal.

After probing and educating themselves on the market, mainly by evaluating the alternatives available, these clients came to understand where both the best deal was for them outside the building and hence, what would be worthwhile for them to accept from their Landlord in exchange for an early lease renewal. 

Even the best negotiators are useless without the best information!

Until next month,

Ben

Ben Blumenthal
Principal Broker | Noah & Co.

Following REBNY's optimistic EOY office report and a strong demand from the legal sector (~25% of Manhattan's 2023 office leases), activity in the Midtown office market continues to climb.

So where's the latest action?

Moving to Midtown

- YMCA Retirement Fund relocating to ~ 25k SF at 1177 AoA
- Dorf Nelson & Zauderer opening first NYC office in Midtown
- Production firm Tinc moving to 3k SF at 1560 Broadway
- Completed Life Initiative to call 10 Grand Central home for 10 years

Renewals & Expansions

- TruArc Partners will remain at 545 Madison for 7+ years
- GFP locked in The Journey Church NYC for 10 years at 247 W. 37th
- CF Entertainment reupped its 16.5k SF space at 1330 AoA

Best of the West

- Jewelry auctioneer Worthy locked in a 4 year lease at 25 W. 45th St.
- Viking Sales Group inked a 12k SF deal at 42 West 39th St.
- 1180 AoA secures two non-profits on long-term deals

Forget office space; Vornado may bring tennis courts to Penn

Capital is flowing back into New York City office buildings

Revised development plans revealed for Port Authority Bus Terminal

BXP buys out 3 partners; doubles down on office space

MTA announces 2 exceptions for new congestion pricing

Former WeWork building may be converted to shelter