Like the proverbial elephant examined by five blind men, the 460 million square-foot Manhattan office market lends itself to many different interpretations. There’s a statistic to support every perspective.
A new report from CBRE cheerfully cites a near 100% rise in year-over-year leasing activity for the first quarter of 2022. The 5.68 million square feet of transactions were up 96% over the first quarter of 2021.
Such large deals as IBM Inc. at 1 Madison Ave. (328,000 square feet), PDT Partners at 60 Columbus Circle and Celonis at 1 World Trade Center (75,000 square feet) suggest a major market rebound.
Average Midtown asking rents climbed 2% over the previous quarter. Midtown South leasing volume was up for the third straight quarter. Downtown’s quarterly absorption was positive for the first time since the third quarter of 2019.
All good news, right? But there’s a different take in JLL’s latest “Office Insight” letter. The brokerage found rising vacancies across the board, due in part to sublease additions surpassing demand.
It noted that first-quarter leasing was higher than in early 2021 but 25% below the fourth quarter.
Large new sublease availabilities “pushed vacancy up to the highest levels recorded since the onset of the pandemic at 15.2 percent.”
Neither set of data is wrong — it’s rather a matter of choosing which facet of the market to emphasize.
Meanwhile, Placer.ai, a site that tracks office building foot traffic, reports a huge 102% increase in foot traffic to Manhattan office buildings in February over the same month in 2021. But the traffic was still 46.7% under January 2020, just before the pandemic struck.
“The city is springing back to life as of the beginning of April, but it’s been slow going,” the site said.
In one of the year’s largest new subleases, Phaidon International is taking 71,239 square feet at SL Green’s 711 Third Ave. The global specialist recruitment agency will move from 622 Third Ave., where the firm had only about half as much space.
Cushman & Wakefield’s David Mainthow represented Phaidon. JLL repped the sublandlord, the Stagwell Group.
Phaidon CEO Harry Youtan said the move “is the next step of an exceptional eight years of growth in New York. It will allow us to hire and develop 200 additional staff, taking our New York team to 500 in total.”
“The space was delivered in move-in ready condition, resulting in little upfront capital investment and construction time, which offered a great solution for Phaidon’s thriving business,” said Mainthow.
The new address is a 592,772 square-foot tower one block from Grand Central Terminal. It was renovated with improvements that include new elevator cabs, large windows and a three-level parking garage.
Marx Realty’s 10 Grand Central, a 500,000 square-foot Midcentury tower at Third Avenue and East 44th Street, continues to fill up — thanks to a recent, $48 million capital improvement program and repositioning.
Of 34,000 square feet of newly signed and expanded leases, the largest was a 12,000 square-foot expansion of HLTH, a conference organizer for health innovation. The new lease, plus a renewal on space it already had, upped the firm’s footprint in the building from 7,000 to 19,000 square feet.
Marx also signed 15,000 more square feet for LIV Golf Inc, Family Management Corp and Kasa Living. On the retail front, fast-casual Mediterranean eatery CAVA is coming to 2,600 square feet of ground-floor corner space.
Marx converted more than half of 46 previously unused outdoor terraces for tenant use. Upgrades also include a new, four-story entry portal on East 44th Street with walnut doors leading into a sleek lobby, and an indoor-outdoor club floor with its own lounge, conference space and landscaped terrace.
One additional sweetener: Israeli-made “Solato” machines that let tenants make multi-flavored gelato in a matter of seconds. Realty Check can attest that the vanilla, at least, is the real deal.
About 65,000 square feet remain available — which pleases Marx CEO Craig Deitelzweig, since old tenants were paying rents far below today’s market. Asking rents at 10 Grand Central now range from $65 to $120 per square foot.
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April 11, 2022 at 02:49AM
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Manhattan commercial leasing activity rises 100% in Q1 from last year - New York Post
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