The Real Deal New York

Good luck finding office space in Midtown East

Availability rates in the submarket are second-lowest in Manhattan

August 03, 2015 05:16PM

From left: 909 Third Avenue, 750 Third Avenue and 919 Third Avenue

From left: 909 Third Avenue, 750 Third Avenue and 919 Third Avenue

The hotter-than-hot Downtown and Midtown South office markets better watch out — Midtown East has arrived.

The availability rate for office space in Midtown East dropped to 4.9 percent in June, the lowest rate in Midtown, according to new CBRE data. Among all of Manhattan’s submarkets, only Noho/Soho had a lower rate, at 4.7 percent, the Wall Street Journal reported.

The robust demand for office space in Midtown East, part of which is in the midst of a rezoning, stands in sharp contrast to levels in 2009, when the availability rate stood at 18 percent.

The average asking rent in the submarket this year is $66.54 per square foot, compared to the overall Midtown rate of $77.75. Back in 2009, the comparable average figures were $54.68 per square foot in Midtown East and $60.45 in Midtown as a whole, according to CBRE.

Major tenants that have leased space in Midtown East in recent years include Bloomberg, which inked a deal for 350,000 square feet at SL Green’s 919 Third Avenue; Interpublic Group of Companies, which leased 100,000 square feet at 909 Third Avenue this year; and Kaplan, which recently moved into its 84,000-square-foot space at 750 Third Avenue, also owned by SL Green. [WSJ] – Ariel Stulberg