Midtown Office Update: May 2024 - Priced competatively within well-run buildings, Midtown office space continues to lease up |
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May 2024

Closing Time

 

In the Midtown office market, there's been a notable increase in building trades as of late due to lender exhaustion, failed business plans and a myriad of other reasons. While serving as a boost of market liquidity, this also sheds light on the net asset value of these buildings, which has led to competitive pricing for vacant spaces and subsequent absorption.

 

Taking one of the worst hit areas (and most pilloried by pundits as "outdated," "obsolete,” and “worthless”), we’ve seen a surprising amount of activity in the Garment District/Penn Plaza market, with appropriately priced spaces getting leased. While loyal to the area, our clients have identified compelling alternatives that they’ve leveraged for better deals, whether it be to renew or relocate.

 

For reference, buildings located between 5th and 6th Avenues are offering rents starting in the $35-40 per square foot range for spaces with brand new installations, while those west of 7th Avenue are offering newly built spaces with rents in the $30-35 PSF range. Comparatively, as-is installations or renewals are landing with rents with an additional 20-30% discount.

 

Recent deals include a full floor on West 37th Street (between 5th and 6th avenues) leasing at $29 PSF, with 3 months free and some landlord work included for a lease < 5-years. Another example is a property on West 35th Street (between 7th and 8th avenues) leasing at $32 PSF, with 4 months free and a brand new buildout, also for a term less than 5-years.

 

Four years after the most acute shock to New York City office space and despite the political headwinds and doubt of NYC’s vitality, we continue to see a brisk pace of leasing activity from our perch on the tenant side. 

 

Our clients are motivated to seize opportunities that optimize their office footprint, whether in quality or cost, and within buildings that are well-run, well-capitalized, and maintain great ownership. Ultimately, the activity we support reinforces our unshakable confidence in Midtown’s resilience and ability to continually adapt to changing dynamics.

 

Until next month,

Ben

Ben HS

Ben Blumenthal
Principal Broker | Noah & Co.

  

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The Best of May
Newsletter Banner (11)

A flurry of upcoming lease expirations has put tenants in the driver's seat to lock in "killer concessions", even as return-to-office numbers increase and renewals become more commonplace

So where's the latest action?

Pleading the Fifth

- 3 new deals bring 461 Fifth 100% leased
- IT provider Ahead expanded to ~ 16.5k SF at 500 Fifth Ave.
- Mundi Westport locked in a long-term deal at 366 Fifth

A Stroll in the Park

- Antares Capital expanded at 280 Park to 76k SF
- 99 Park Ave will remain home to Flushing Bank for 10+ years
- Publisher Lee & Low joins 2 others inking deals at 381 PAS

Made for Madison

- Non-profit Unbound Philanthropy is moving to 575 Madison
- Several leases totaling over 17k SF signed at 340 Madison
- 63 Madison Ave. set to be home for American Eagle's NYC HQ

Best of the West

- Interactive Brokers expands to ~23k SF space at 1133 AoA
- The NYPD signed a 20-year lease at 31 Penn Plaza
- Tishman Speyer locked in 3 new leases across Rock Center

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Noah & Co., 600 Fifth Avenue, 2nd fl., New York, NY 10020, (212) 947-7120

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