While two large recent deals may signal Manhattan’s office leasing market is finally thawing, the New York Post said industry insiders remain concerned because neither represented a relocation. In both Viacom’s agreement for 1.6 million square feet at 1515 Broadway and Morgan Stanley’s deal for 1.1 million square feet at One New York Plaza, the tenants were never close to making commitments to — and thereby solidifying — one of the city’s new towers, such as the World Trade Center buildings, 11 Times Square, 250 West 55th Street, and the office portion of the International Gem Tower.
“During uncertain economic times, many companies will elect to renew,” said Cushman & Wakefield broker Andrew Sachs. “They’ll stay in the same envelope of space and avoid the big expenditure of moving.”
However, the trend also shows the strength of the city’s much-maligned existing office stock. It has also proven to be a boon for landlords who haven’t had to face large swaths of suddenly empty space. [Post, 2nd item]