Midtown offices grow through “space inflation”

New York /
Mar.March 26, 2012 01:30 PM

Out of a sample of 50 office buildings in Midtown, over half have grown “significantly” over the past 20 years, while just one of them was actually physically expanded.

According to Crain’s, which cites data from a new Commercial Tenant Real Estate Representation report, 34 percent of the buildings expanded by 5 percent or more over the past 10 years. By expansion, the study means new building measurements issued by landlords, such as including hallway and lobby space in rentable square footage, which increases rent collections. The study refers to this as “space inflation,” and if applied to the rest of the Manhattan office market, Crain’s wrote, “that would translate a total annual rent hike for tenants of $775 million.”

As The Real Deal reported two weeks ago, this feature of the market, also called “loss factor,” makes some tenants’ blood boil, and has led to a lawsuit from a small tenant in Midtown’s Fisk Building.

“What tenants really focus on is the rent per square foot,” Marisa Manley, president of CTRR, told Crain’s. “Sometimes it is easier to increase the rentable square footage than it is to increase the rent.”

According to the CTRR study, 1140 Sixth Avenue, a 20-story office building located between 44th and 45th streets, grew 41 percent between 1990 and 2011. The only building to physically expand its size was 666 Third Avenue, the Chrysler East Building, where subcontractors were indicted last year for alleged collusion with Lehr Construction. [Crain’s]


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
 Fredrik Eklund and the property (Getty, Steve Frankel)
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Silverback's Josh Schuster and Hopson's Chu Mang Yee with rendering of the project at 131-141 East 47th Street (LinkedIn, Getty, Ismael Leyva Architects)
Schuster out as Hopson borrows $156M for Midtown tower
Schuster out as Hopson borrows $156M for Midtown tower
(photos by Joe Lovinger/The Real Deal)
Day 2 of ICSC: Retailers button up to network, prep for uncertain future
Day 2 of ICSC: Retailers button up to network, prep for uncertain future
(Photo by Jennifer S. Altman)
The Real Deal celebrates “The New Kings of New York” debut
The Real Deal celebrates “The New Kings of New York” debut
Boston Properties' Hilary Spann and Eldridge CEO Todd Boehly in front of 767 Fifth Avenue (Boston Properties, Eldridge, Google Maps)
Firm ditches Park Ave for entire floor of GM Building
Firm ditches Park Ave for entire floor of GM Building
Mayor of New York City Eric Adams (iStock/Adams via Paul Dilakian)
Mayor proposes restoring unstaffed voucher discrimination unit
Mayor proposes restoring unstaffed voucher discrimination unit
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...