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New York

Mixed rental story in Midtown trophy towers

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From left: Cynthia Wasserberger, 9 West 57th Street and 767 Fifth Avenue (building photo source: PropertyShark)

[Updated 2:30 p.m., Oct. 11, 2010] Asking rents climbed in a selection of Midtown’s top office buildings over the past six months as the leasing market tightened, with some buildings reaching the $200-per-square-foot level, according to a report released today by commercial services firm Jones Lang LaSalle.

The top asking rents for the 23 buildings such as 590 Madison Avenue and the Seagram Building at 375 Park Avenue — which cater to hedge funds, investment management and other financial service tenants — rose to $107 per square foot last month from $98 per square foot in April.

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But there was a clear split in the market between top-tier floors and less desirable locations in the buildings, the report shows. The lowest asking rent in the properties surveyed only rose by $1 per square foot during the same period, to $64 per square foot.

The most expensive asking rent was at Sheldon Solow’s 9 West 57th Street, where the top asking rent was $200 per foot, up from $180 per foot in April. The biggest increase was at the GM Building at 767 Fifth Avenue, where asking rents rose by $55 per foot to $175 per foot.

“It should be noted that these sizable increases in rent seem to be limited to tower floors or premier spaces within exclusive trophy properties, and is not a pervasive trend throughout Manhattan,” Cynthia Wasserberger, managing director at Jones Lang LaSalle, said in the report, which she authored.

The only building to see its top asking rent fall was the Paramount Group’s 745 Fifth Avenue, where rents declined from $100 per foot to $80 per foot, the report showed. Although the top asking rents at 745 Fifth Avenue are lower now, the rents did not decline, Wasserberger said in an e-mail. The highest-priced floors at the top of the building were rented, leaving the less expensive space on lower floors available, thereby lowering the top asking rent.

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