Nearly a month after Condé Nast formally agreed to lease about 1 million square feet in 1 World Trade Center, brokerage firms are mulling over what impact the publisher’s move from Midtown will have on the Downtown market.
One commercial brokerage firm, Cassidy Turley, is taking a close look at which companies have a tight relationship with the media giant to see if they might transfer their offices to Lower Manhattan to remain close by, and hire Cassidy Turley to assist them.
The impact from Condé Nast’s move downtown “can’t be overestimated,” Robert Sammons, Cassidy Turley’s vice president of research, said.
They would be mulling the decision as the market Downtown has been steadily tightening over the past several months.
Cassidy Turley released its Manhattan office leasing report this week, which showed a tightening of the availability rate for Downtown, falling by .2 points to 12.4 percent in May from 12.6 percent in April.
For Manhattan overall, the availability rate fell by .2 points over the past month to 12 percent, while the average asking rent rose by $0.46 per square foot, to $48.91 per square foot.
Sammons said smaller companies that work closely with the publisher, whose titles include magazines like the New Yorker and Vogue as well as online websites like Hotel Chatter and Epicurious, would want to remain nearby.
“We are culling who they work with,” he said, to identify clients to target. He said it has been the case in the past when large tenants move, smaller ones tag along later. He suggested printing firms or law firms might go.
But others were skeptical that many firms would move just to be near a major client.
“Do you need to be across the street from someone? It is a convenience that is not necessary. That will not be the draw, not in my opinion,” Howard Rosen, regional managing director for Grubb & Ellis, said.
But he said companies would follow the publisher downtown, simply because the giant media firm has “validated” Lower Manhattan for other creative companies. He expected some of the Internet-related firms that have made Midtown South a digital center might now give Downtown another look.
“There are a lot of old buildings [Downtown] these creatives could occupy,” he said.