The Real Deal New York

Midtown South office rents gain on Midtown

May 21, 2012 11:00AM

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A rendering of 51 Astor Place

In an indication of the Midtown South submarket’s continued strength relative to the Midtown submarket, Minskoff Equities’ new office development will have asking rents between $88 and $115 per square foot, Bloomberg News reported. Despite the general malaise in the commercial leasing market, the Midtown South area continues to diverge from the rest of the marketplace, Bloomberg said — numbers that line up with The Real Deal‘s previous reports.

Minskoff principal Ed Minskoff says his new development, on Astor place between Cooper Square and Third Avenue, is seeing tons of interest from “lots of very, very exciting companies,” according to Bloomberg.

Asking rents for Midtown South’s class A spaces averaged $66.74 per square foot in April, an increase of 16 percent since the fourth quarter of 2011, Bloomberg said. Meanwhile, in Midtown, Class A rents rose only 1 percent. The depressed rent growth in Midtown is due to the submarket’s dependence on financial services tenants.

“What’s happened is very quickly, before our eyes, Midtown South rents are rising higher than for many buildings in Midtown,” David Falk, president at Newmark Knight Frank, told Bloomberg News. “Buildings where maybe you’d pay $50 a foot are now getting low $60s.” [Bloomberg]

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