PepsiCo has signed a five-year lease for a 19,800-square-foot space at 350 Hudson Street — its first office space in Manhattan, the New York Observer reported. [more]
Posts Tagged ‘office space’
Financial services company Sterne Agee has increased its New York office space at 277 Park Avenue by 50 percent, Crain’s reported. Stern Agee initially leased space at the 50-story tower in August 2011. It will now lease the building’s 26th floor for about 10 years. Rents in the building, which is largely occupied by JPMorgan Chase, are roughly in the $60s and $70s per square foot, Crain’s reported.
“At this point, we’re doing everything we can to grow,” William Holbrook, the chief operating officer of the Birmingham, Ala.-based firm, told Crain’s. “This opportunity came up and we took it.” [more]
Some 10 million to 15 million square feet of office space in Lower Manhattan has been taken offline by Hurricane Sandy. More than 10 percent of the Financial District’s 94 million square feet, according to Jones Lang LaSalle tristate CEO Peter Riguardi, the New York Post reported. As The Real Deal told you last week, 1 New York Plaza and 55 Water Street, are just two examples of major downtown addresses where companies have been forced to leave by storm damage. [more]
As commercial rents in technology firm heavy Midtown South rise, smaller tech firms and start-ups are turning to communal work spaces or, in some cases, are eschewing office space altogether. According to the Wall Street Journal, each Thursday in August tech workers from a diverse set of companies will meet at picnic tables under the Manhattan Bridge to program, design and enjoy a beer. This non-traditional office space and free WiFi are provided by the office-sharing company Loosecubes and the Dumbo Improvement District in order to give fledgling tech firms a rent-free space to spread their wings. [more]
The city’s Economic Development Corp. and the Empire State Development Corp. are calling for developers to turn a Harlem parking garage into an office building and cultural center, the Wall Street Journal reported. The request for proposals, slated to be issued today, will seek a developer to build 300,000 square feet of space. [more]
Tenants and landlords quietly added millions of square feet to the Midtown market, pushing up the amount of available space by a sizable 2.1 million square feet in the first quarter, figures from commercial firm CBRE Group released today reveal. The newly available blocks of space fueled the largest amount of negative net absorption since the second quarter of 2009 in the midst of the economic slowdown, an analysis of CBRE data by The Real Deal shows. [more]
Nationwide, office space is filling up in downtown areas, while its counterpart in the suburbs remains vacant. “It’s a reversal of what we’ve been seeing in decades,” the Wall Street Journal’s Anton Troianovski says in the video above.
In the 1990s, the vacancy level was higher downtown than in the suburbs, but now downtown is leading the recovery in the office space market. “The downtown office market has stabilized, while the suburbs have lost about 280 football fields worth of space,” Troianovski said, which may be attributed to companies expanding and looking for more space.
Office tenants in Midtown leased more space in November than in any month since the middle of 2006 as new office leasing rang in at double the monthly average, a new report covering all firms’ deals released today by commercial firm CB Richard Ellis shows.
“The month’s robust leasing activity — the largest single-month total since June 2006 — was achieved by deals of all sizes across the entire market,” the Midtown report says.
Tenants struck relocation or expansion deals for more than 2.4 million square feet in Midtown, compared with 1.2 million square feet the month before. TRD… [more]
While the global commercial real estate market remains tenuous, with Manhattan and Miami still struggling, Newmark Knight Frank’s 2010 Global real estate markets annual review shows that progress is being made, with several office markets around the globe having shown improvement by the end of 2009. Both the Manhattan and Miami office markets hobbled through the end of the year, according to the report, with Class A office space vacancy rates of 8.1 percent and 20.8 percent, respectively, by the end of the fourth quarter…. [more]
Downtown Brooklyn office real estate is suffering, according to Crain’s, with just three deals inked last year for 30,000 square feet of space or more. With lowered Manhattan rents putting up a fight and tenants looking to streamline their space, the Downtown Brooklyn market is hurting — and it’s tough to tell when it might rebound, according to Chris Havens, CEO of Creative Real Estate Group in Brooklyn. “The market is a mixed picture, with a vacancy rate that is lower than almost any major office market in America, but it’s a very slow-moving market,” Havens said.
555 Fifth Avenue and Tadd Wisinski, a senior vice president with UGL Equis (building photo source: PropertyShark)
The New York office for the broadcast communications division of the
multi-billion dollar Harris Corp. is moving uptown from its Midtown
South location to Atco Properties’s 555 Fifth Avenue, at the corner of
46th Street, according to a release by the tenant broker on the deal,
The broadcast division is taking 17,460 square feet in the 19-story
building with a move-in date of April 1, a spokesperson for UGL Equis
said. The firm currently occupies 15,000 square feet in 99 Madison
Avenue at 29th Street.
The terms of the deal were not disclosed. Asking rents in the
238,000-square-foot building on Fifth Avenue, which is 18 percent
available, range from $49 per square foot to $54 per square foot,
according to leasing data Web site, MrOfficeSpace.com…. [more]
Once considered a viable alternative to pricey Manhattan office space, the New Jersey waterfront is now losing its luster in the eyes of fiscally-minded businesses, according to Crain’s, making 2009 the most dismal the region has seen in two years. The disparity in lease rates between New Jersey waterfront office space, in cities like Weehawken, Hoboken, and Jersey City, and Manhattan is slowly narrowing, leading to a slowdown in activity. After massive asking rent cuts in Lower Manhattan, the rent gap between there and New Jersey dwindled to just $6 per square foot, according to Cushman & Wakefield. As a result, the first nine months of 2009 saw 710,000 square feet of space hit the market with no takers.
The long-expected return of unneeded office space to the Downtown market by large financial firms may push vacancy rates up by two-thirds, a Cushman & Wakefield expert in the market said today.
Andrew Peretz, executive director at commercial services firm Cushman & Wakefield, predicted the vacancy rate, now at 9.6 percent Downtown, could reach 15.75 percent, a jump of 64 percent.
That increase in the vacancy rate would drive down prices, he said.
“I do think there will be a decrease in asking rents over the next two or three quarters,” Peretz said. He was speaking this morning at the firm’s fourth-quarter market briefing at the company’s Midtown headquarters.
For Manhattan overall, the situation was not as bleak, although prices may not rise for more than a year and a half, Cushman & Wakefield COO Joseph Harbert said at the same event…. [more]
While New York City may be known for its pricey office space, that
paradigm could change soon. Washington, D.C. is inching closer to the
Big Apple in terms of price per square foot. The two cities have long-competed for the dubious title of most expensive city for office space, the Wall Street Journal reported, but rarely have the two been so closely neck-in-neck. While New York office
space’s price per square foot declined almost 20 percent
year-over-year, according to fourth-quarter data released by research
firm Reis, average rents in Washington dropped just 3 percent. In the
fourth quarter, New York City’s average office space rents hovered
around $45 per square foot in the fourth quarter, according to Reis,
while Washington rents were approximately $42 per square foot. The
disparity in office performance is based in large part on the two
cities’ divergent industries, according to Robert Bach, a chief
economist for Grubb & Ellis. “The financial crisis hit New York hard,
which is why it’s down so much, whereas the government is one of the
few sectors that has actually added jobs,” Bach said. This could lead
to an even tighter race between the two cities, price-wise, according
to Reis’ report. The firm estimates that Washington will actually
exceed the Big Apple in its average rent per square foot by about $.20
by the end of 2010.
The average asking rent for office space in the northern end of Midtown has dropped significantly to $59.31 per square foot, from
$88.81 per square foot a year ago. “Tenants once priced out of Midtown
now see it as a viable destination. Demand drives deals, and we’re
seeing that play out,” said Mark Jaccom, CEO of Manhattan-based
commercial real estate services firm FirstService Williams. Other
stabilizing factors in Midtown include the amount of available
rentable space. Nearly two-thirds of the available space in Midtown is
at 450 West 33rd Street as well as the Empire State Building.
Additionally, new affordable options in Midtown and other parts of the
city have tenants flocking from downtown, which posted the largest
availability rate increase, to 13 percent up from 11.6 percent last
year, according to FirstService Williams. … [more]
With the Depository Trust and Clearing Corporation’s October decision to relocate 1,600 employees from an office at 55 Water Street in Manhattan’s Financial District to New Jersey, commercial real estate experts are suggesting that other large tenants may also follow suit. Accounting group Deloitte has suggested that it may relocate as many as 1,400 jobs from its two Manhattan office locations at Two World Financial Center and 1633 Broadway, over to New Jersey or Connecticut. As office space becomes increasingly expensive, New York City landlords are struggling to hold onto office tenants, the New York Observer reported. “Depository is perhaps the first of several we may see begin to explore” offices outside Manhattan, Pat Murphy, a vice chairman at CB Richard Ellis, said.
From the November issue: The amount of free rent that landlords are offering to entice reluctant tenants to sign contracts has hit record levels in the current downturn, despite the fact that asking rents have started to stabilize in parts of the Manhattan leasing market. In the third quarter, two Midtown leases were signed with 17 and 18 months of free rent — double the average of eight and a half months, figures from the most recent report from commercial services firm CB Richard Ellis showed. Some industry professionals said even longer rent-free periods were being negotiated. “For some landlords it may be advantageous to give more free rent [but] with a higher rent [per square foot],” he said. The free rent was just one element of a soft Manhattan leasing market that saw a 1 percent decline in September asking rents. Those rents fell to $50.78 from $51.28 per square foot the month earlier, the CBRE data shows. Average asking rents are now down 29 percent from the peak of $71.92 per square foot in July 2008.
While the rest of Manhattan holds its breath for a commercial market collapse, Lower Manhattan has been experiencing dramatic ups and downs over the last nine years, according to a report
released today by Eastern Consolidated.
freeze of September 2008 and the devastation of 9/11 led to a
preponderance of delayed developments and vacant retail
properties rarely seen in other neighborhoods, the report says. With more than 200 office buildings containing more than 100 million
square feet, Lower Manhattan is the third largest office submarket in
the U.S., yet the volume of office building sales has dropped dramatically in
2009, with just one office building sale so far this year. For all of last year, eight
buildings sold. During the peak year, 2007, 24 office buildings in the
neighborhood were sold. TRD… [more]
The Manhattan office market isn’t looking good, as Moody’s/REAL Commercial Property Price September Indices for the borough dropped 22.9 percent between the second quarters of 2008 and 2009. The indices track the price changes of commercial real estate in 10 top U.S. markets. This figure is in line with the 21.2 percent national drop on the same scale, as analysts predict that as much as $700 billion in commercial debt could come due by 2013. Dan Fasulo, managing director at Real Capital, said that while commercial lenders look to foreclosure as an option on distressed properties, it’s not a fait accompli. “I think, at some point, if the building is not performing, if it lost a major tenant or rents went down and they can’t pay debt service, [a lender] might foreclose, but these lenders are not going to give away assets for cents on the dollar,” Fasulo said. “They are going to tuck it away in their portfolio.”
The Midtown office vacancy rate reached 17 percent this July, marking a 38 percent increase from the beginning of 2009, according to data from Tenantwise, a commercial real estate tracking group, while rent-per-square foot dropped 28 percent to $58. While some claim that the commercial real estate market in Midtown isn’t as bad as the 1970s trough, New York Magazine says that Midtown Manhattan’s skyscrapers are struggling. The result is a crop of so-called vulture investors, who hope to profit off the bottom-rung prices.