The tale of commercial development in Midtown Manhattan is of a gradual westward expansion, with the oldest office stock located along Park Avenue and the newest buildings situated on the West Side, according to a new report by brokerage Avison Young seen by the New York Observer.
Development in Midtown kicked off after World War II and started along Park Avenue, with iconic buildings such as 375 Park Avenue and 200 Park Avenue breaking ground. These buildings traditionally catered to financial services tenants such as JPMorgan Chase and UBS. Seventy-eight percent of Park Avenue’s building stock was built between 1950 and 1970, the report shows.
Rising corporate demand began pushing development to Sixth Avenue by the 1970s, with the advent of major “institutional-quality” buildings such as 1271 Avenue of the Americas — better known as the Time-Life Building– that rose to cater to printing, publishing and legal services firms. Sixty-eight percent of Sixth Avenue’s building stock, the report states, was built between 1960 and 1985.
The 1990s saw the rise of Times Square, with the completion of Nos. 3, 4, 5 and 7 Times Square, in which tenants such as Conde Nast, Reuters and Ernst & Young each took between 500,000 and 1 million square feet in the buildings. Sixty-three percent of new building stock in Times Square and on Seventh Avenue was built between 1985 and 2004, the report shows.
Eighth Avenue continues to hold the “largest concentration of the newest inventory in Manhattan,” Avison Young’s James Delmonte told the Observer, with 54 percent of its building stock built since 2006.
The area has seen major activity in recent years, including the New York Times’ move to 420 Eighth Avenue and Hearst Publications’ redevelopment of its headquarters at 959 Eighth Avenue.
“Firms are looking for newer product and larger floor plates, largely because there really is no available land on the East Side,” Delmonte said.
But various lease expirations and zoning restrictions would mean that developers will continue to move westwards in search of fertile ground for development, Delmonte said, though a proposed rezoning of Midtown East could affect this movement.
John Ryan III, a principal at Avison Young, credited the city for continuing to fuel the movement westwards, through investments such as the 7 train subway extension and construction incentives for megaprojects such as Hudson Yards on the West Side. [NYO] –Hiten Samtani