The Real Deal New York

Midsize banks grab office space as big banks downsize

Smaller outfits picked up nearly a million square feet since January 2013

February 19, 2014 12:38PM

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From left: 11 Madison Avenue, 280 Park Avenue and 399 Park Avenue

From left: 11 Madison Avenue, 280 Park Avenue and 399 Park Avenue

The downsizing by big banks has caused several of Manhattan’s office towers to bleed millions of square feet of space in recent years, but medium-sized institutions are slowly but surely moving in to fill the void.

Midsize financial firms, defined as those outfits leasing between 20,000 square feet and 100,000 square feet of space, have picked up almost 1 million square feet of Manhattan office space since January 2013, according to data from real estate services firm CBRE Group cited by the Wall Street Journal. Larger firms leasing more than 100,00 per square feet, meanwhile, have fallen flat in terms of added space.

Most of the mid-sized banks signing leases since January 2013 were also expanding, the CBRE data shows, with over 70 percent getting larger.

Downsizing by big companies appears to be “driving some of the smaller financial servies that seem to be popping up every day,” Steven Durels, director of leasing for SL Green Realty, told the Journal.

Still, there’s still a lot of space left to fill. The city’s ten largest banks — preferred landlords for tenants because of their traditional ability to shell out high rents — shrink their office space by 6 million square feet from 2008 to 2012, according to a 2012 report from International Strategy & Investment Group. Since that time, an additional 2 million square feet are either in the process of being dropped or will soon be shed. [WSJ]Julie Strickland

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