Midtown’s best buildings are signed. Now, even the second and third -degree officials are quickly disappearing from the market, as 5.5 million square meters of work space has been converted for residential use. But there is a great winner from Crunch: Lower Manhattan.
“Midtown has become too narrow for large tenants to look for quality space,” said Jonathan Mazur, a Newmark research analyst. “In the city center has always been the most cost -effective market and has the greatest opportunity for large tenants to rent.”
There is a lot of stubborn space because last year, downtown had the lowest amount of rent ever recorded. “Those of us in the market are now observers and participate in strong activity,” John Wheeler of Jll said, stressing that the current pipeline for subleazes and direct deals is large. “Twelve months from now you will see a lot of stories for rent and ask, ‘Where did this come from?’ “
For example, Jane Street Capital, blocked 983,791 square meters in Brookfield Place with its expansion 600,000 square feet to 250 Vesey St. This made the owners of the buildings, Brookfield Asset Management, as well as other tenants, to leave the road. The Collegeboard for one, will move inside the complex to 41,000 square meters to 225 Liberty.
In 1 world trade, two tenants are nearly double -sized.
“We become the largest the largest Tami [technology, advertising, media and information] The community throughout New York and has begun to see a higher percentage of finance agreements and for the first time, have two rental rentals, “said Eric Engelhardt of Durst, who owns and administers property for New York and New Jersey Port Authority.
One tenant is receiving its first city office and another is moving from the area. “Views and facilities are attractive to them,” Engelhardt said.
Moreover, Axsome Therapeutics underlined an additional 48,000 square meters from Condu Nast bringing its occupation to 96,000 square meters while BNY Mellon is negotiating a four-year sub-year for 200,000 square meters to use while renewing its headquarters in 240 Greenwich St. Greenwich St.
For April, CBre reported 127,000 square meters for rent last year now 1.55 million square meters 122% from 2024. Keep in mind that even in the city center, Class A rents will push at $ 80 high per foot or even threefold flowers high in 1 world trade.
“The Manhattan market in general has poured nearly 70% of the sublease space added during the pandemia … enough is absorbed. “
Jonathan Mazur, a research analyst with Newmark
American Express is still negotiating with Larry Silverstein to anchor a new world trade center, but everyone says, “is complicated”.
Sources familiar with the talks say Amex would receive the lowest flowers of a 2.5 million to 3 million -foot tower tower and include a lot of convenience for its employees. But the financial firm is still presenting how much space it will take when it opens about five or more years from now.
Silverstein, who returned 93 years old on May 30, should also understand how much square footage he has to leave others and with what rent, which can be $ 150 per foot or more against current city downtown trophy rents.
For tax reasons, Amex can sell its current excavations and buy its share of the new tower, similar to what it did with its Hudson Yards office companies, which created a strong financial model for lennders.
Once they reach the sharp numbers, the American Express Board will have to approve the deal.
Meanwhile, the latest city center deals include a move from Masterworks by Brookfield’s 225 Liberty St. in 1 World Trade Center in a sublivs of 37,000 square meters from network capital. Uber also expanded to 351,000 square meters leasing 44,000 square meters from Silverstein properties to the 3 World Trade Center.
Enlargement of tenants and suction of Subles are helping the overall market. San Francisco -based stripe opened its first New York office in 2019 in 199 Water St. And one year of action, expanded and transferred to 28 Liberty, where he subjugated 147,000 square meters. When other tenants faced negotiations to actually underestimate their floors, Wheeler said they “hit the pause”.
“Now we are seeing Sublandlords taking space again for their needs,” Wheeler said.
In less than two years, Newmark statistics show that the subljet available in the city center has fallen by 35%, dropping from 6.6 million square meters in the second quarter of 2023 to 4.3 million square meters in late April.
“Not every tenant is a yard. “
Eric Engelhardt i Durst
“The Manhattan market in general has poured nearly 70% of the sub -space added during the pandemia, “said Mazur i Newmark.” Very little is immersed. “
107 newly developed Greenwich will soon be rented 96%. While most of the agreements have been the only floor, it is now two floors.
On the 18th floor, which has an outdoor landscape terrace, owner Trinity created a better art floor that Wheeler says “was essential” for tenants who decided to rent there. There are now conference rooms, a full kitchen and the summer/grass area area. As another more unusual person, Gymnasium on the lower floor of the building and the trinity commons basketball court and used for school programming in the area is open to tenants from 6
While there is main activity in Class A space, most of it currently come from musical chairs – ie, tenants forced to cross into conversion or update on a flight to quality from the other space to lower Manhattan.
Rehabbed but empty 1.6 million square legs 60 Wall St. is also cheating tenants. Legal firm with white shoes Sullivan & Cromwell is weighing a movement from 125 Broad St. And looking for 500,000 square meters while Moody’s in 7 world trade centers is looking for 300,000 square meters and Aon, now in 1 line is after 175,000 square meters – but everyone can renovate.
Brokers say Water Street has always been a “valuable game” for office tenants and there are numerous rental deals in anticipation of $ 50 and $ 60 for foot.
Tenants like so much in the city center, they often do not move to other parts of the city. S&P Global, a 350,000 square meter tenant in 55 Water St. Window placed a relocation in Midtown last year, but ultimately decided to stay in place.
While the buildings planned for conversion are purchased or elbow, their tenants are moving elsewhere. This is resulted in some office tenants over 100,000 square meters to negotiate an exit – to be paid – and new excavations.
“They are pragmatic and get a bad smell as part of the end of their rent and enter a market that is very attractive,” Wheeler said. “Not too much rent have a breakdown clause, so most are biased negotiations with tenants.”
Therefore, these converts are causing “immediate positive absorption” as the remaining tenants move, said Engelhardt: “They are moving and swallowing the nearby assets that may have been fighting. But this is a top-down, bottom-up suction.”
Vanbareton is converting both 180 Water St. and 77 water that led engineer ARUP to expand to 99,418 square meters in a move to 140 broadway.
Among the buildings that are being converted are 111 square meters of 111 square meters and the lowest over 800,000 square meters of 80 pines which had previously been fired by AIG.
When office buildings are 50% to 60% for rent, Ral’s Spencer Levine said owners do not hold bullets because they think the grass can be greener on the other hand.
“Everyone thinks their construction can be converted, but in reality, it’s only a small number.”
Brian Waterman of Newmark
But when it comes to selling them in a converter, Levine said there is still a “detachment between the seller and their expectations”.
“Everyone thinks their construction can be converted, but in reality, it’s only a small number,” he continued. “The amount of money needed to make them livable is unworthy.”
Most often, he said, the foundations of construction do not become “great living experiences”. One thing to return, he added, and another to create a project where people want to live.
To see more lead in the city center, Brian Waterman from Newmark said the rest of the market should be strengthened.
“They go there out of need, not out of desire,” Waterman explained.
But Engelhardt is more optimistic. Because the economic base of the city is so wide, “not every tenant is a Hudson Yards or a Park Avenue tenant,” he said, “and those who are more sensitive to prices or in search of an economic transaction are looking at the city center. “
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