A Third Ave. Advantage
I wanted to share some advantages and opportunities that exist on the Third Avenue office corridor relative to the neighboring Avenues.
With smaller floor plates and divided floors, Third Avenue boasts a relatively high-concentration of small to mid-sized businesses. It also holds a special place in my heart as the place where we worked many of our early assignments in the business, touching every building from 39th to 59th Street.
Key Points
1. Solid Value Play:
Third Avenue has historically been known as a value play corridor, offering competitive rental rates compared to Park and Fifth Avenues. This makes it an attractive option for businesses looking for affordable office spaces in Midtown.
2. High-end Upgrades:
Despite some completely vacant buildings, many landlords on Third Avenue have invested in high-end renovations and upgrades to attract tenants. For example, the Durst Organization's 825 Third Avenue underwent a $150 million renovation, Sage Realty has completely repositioned 767 Third Avenue with state of the art amenities (available to 777 & 747 Third tenants as well), and 780 Third has repositioned itself with a very competitive offering for boutique tenants (2,000-5,000 SF).
3. Cheaper Rental Rates:
The average asking rent for class-A space on Third Avenue is $66 per square foot, which is closer in price to Downtown ($58 psf) than Midtown ($79 psf). This makes it an appealing option for businesses looking for quality office space at a more affordable price point.
4. Renovation and Conversion Opportunities:
Some landlords are considering office-to-residential conversions, such as 750 & 850 Third Avenue. These projects, while requiring tax breaks to be financially viable, offer an opportunity to revitalize older buildings and attract new tenants.
Each building has it’s own story, but a handful of Third Avenue buildings still boast strong occupancy rates (ie. 757, 800, 875, 885, 909 Third).
Moreover, Third Avenue presents a unique opportunity for businesses seeking office space in Manhattan. With its solid value proposition, high-end upgrades, and competitive rental rates, it remains a viable option in the ever-evolving New York City office market.
Until next month,
Ben
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