how's the market? midtown office space begins 2025 with a bang

January 2025

New Year: How's the Market?

The Midtown office market is witnessing a significant turning point as the liquidity cycle gains momentum. In 2024, banks began addressing (and acting on) the weight of defaulted, outdated loans, taking write-downs and finally releasing these assets to the market. This pivotal move is unlocking opportunities for buyers eager to acquire distressed or undervalued properties.

The price discovery and traction from this activity is cracking open the door for lenders to come back, albeit gingerly, to financing office properties.

With new ownership structures emerging, capital stacks are being reset to reflect current market realities - allowing landlords to 'meet the market' on rents and invest the capital to lease stagnant space.

In November 2024, leasing activity totaled 1.49 million square feet, surpassing the five-year monthly average by 38%. Year-to-date, leasing activity reached 14.37 million square feet, marking a 42% increase from the prior year.

On the (space) supply side, we are seeing the catalyst for this surge emanate from banks starting to address their defaulted loans, facilitating property sales, and enabling capital restructuring - leading to vacant space absorption.

On the (tenant) demand side, well, companies want their people in the office!

Until next month,

Ben

Ben Blumenthal
Principal Broker | Noah & Co.

The Best of January

Coming off a year in which leasing activity inched closer to pre-pandemic levels and a record number of leases were signed for class-A space, Midtown businesses have remained busy locking in deals.

So where's the latest action?

< 10k SF

- Eventique is relocating its HQ to 234 West 39th Street
- Law firm Jacobs P.C moving to ~ 9k SF to 717 Fifth Ave.
- RXR renews 2 tenants in its Midtown portfolio
- ISS and Michael Page locked in deals at APF's 1156 AoA
- PureStream joined BasePoint Capital with renewals at 75 Rock