Sublease space on Sixth Avenue pushing down rents

New York /
Jun.June 17, 2013 09:00 AM

Rents on Manhattan’s once-invincible Sixth Avenue have flatlined and vacancies are on the rise, as technology firms are showing a preference for trendier neighborhoods and large blocks of sublease space have hit the market, the Wall Street Journal reported.

More than 780,000 square feet of office space is available for sublease along Sixth Avenue, according to CoStar data cited by the Journal. This allows tenants to find bargains, but is a worry for landlords who may have made recent big investments in the area.

“Large contingencies of sublease availability will, in general, drag down rents nearby,” Noam Shahar, research director at commercial real estate information company CompStak, told the Journal.

AXA Equitable’s recent efforts to sublease its space at 1290 Sixth Avenue are telling. The financial services firm recently inked a 148,421-square-foot sublease with Morgan Stanley — by far the year’s largest — as The Real Deal reported.

But rents paid were in the $40s per square foot, according to CompStak — far below the $88 per square foot AXA pays landlord Vornado Realty Trust in their direct lease.

Meanwhile, tech-friendly Midtown South has seen average rents jump 9 percent in the first quarter, passing the $60 threshold for the first time, according to data provided to the Journal by CBRE. [WSJ]  – Hiten Samtani


Related Articles

arrow_forward_ios
Brookfield Property Partners CEO Brian Kingston and 660 Fifth Avenue (Brookfield Properties, Getty Images)
Major asset manager moves to 660 Fifth Avenue
Major asset manager moves to 660 Fifth Avenue
Marx Realty president Craig Deitelzweig and 545 Madison Avenue (Marx Realty, Google Maps, Getty Images)
Milstein’s real estate firm extends at 545 Madison Avenue
Milstein’s real estate firm extends at 545 Madison Avenue
From left: Savitt Partners Bob Savitt and Tory Burch with 11 West 19th Street
Tory Burch staying put at Savitt’s 11 West 19th Street
Tory Burch staying put at Savitt’s 11 West 19th Street
Bruce Teitelbaum, 106 West 145th Street and Al Sharpton (Getty, Google Maps)
Teitelbaum slaps Sharpton with legal notice at Harlem HQ
Teitelbaum slaps Sharpton with legal notice at Harlem HQ
Jack Resnick & Sons president Jonathan Resnick and 250 Hudson Street (Getty Images, Google Maps)
PR giant Edelman renews massive space at Resnick’s 250 Hudson Street
PR giant Edelman renews massive space at Resnick’s 250 Hudson Street
RXR CEO Scott Rechler and 620 Sixth Avenue (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images, Beyond My Ken, CC BY-SA 4.0 - via Wikimedia Commons)
RXR sues insurers over infectious disease coverage
RXR sues insurers over infectious disease coverage
Colette at 767 Fifth Avenue and restaurateur Juan Santa Cruz (Colette, Getty,Pablo Costa Tirado (…, CC BY-SA 3.0, via Wikimedia Commons)
Want to join Safra’s private club at GM Building? It’ll cost you $125K
Want to join Safra’s private club at GM Building? It’ll cost you $125K
Columbia Property Trust's Nelson Mills and 114 Fifth Avenue (Illustration by Kevin Cifuentes for The Real Deal with Getty Images, L&L Holding Company, Columbia Property Trust)
Capital One ups deposit at L&L’s 114 Fifth Avenue
Capital One ups deposit at L&L’s 114 Fifth Avenue
arrow_forward_ios

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

Loading...