The Real Deal New York

Manhattan office leases more than double in Q4

January 02, 2014 06:15PM

Office leasing in Manhattan hit new heights in the fourth quarter of 2014, buoyed by Citigroup’s 2.6 million-square-foot renewal and a flurry of activity Downtown.

A total of 12.7 million square feet of leases were signed in the fourth quarter, up from 5.8 million during the same period of 2012, according to a report from brokerage Studley cited by Bloomberg News. The office availability rate in Manhattan stayed steady at 12.2 percent.

Landlords sought an average of $63.04 per square foot in the final quarter of 2014, a 10.6 percent year-over-year increase. In Midtown, rents averaged $72.32 per square foot, while Downtown rates lifted 19 percent to $52.27 a foot.

Lower-priced space Downtown drew a number of value-seeking tenants, such as advertising and media company GroupM, which moved from the Garment District to anchor Silverstein Properties’ 3 World Trade Center and law firm Jones Day’s move to 330,000 square feet at 4 Brookfield Place. The activity continued a surge seen during the previous quarter.

“Manhattan’s core office-space users — major banks, law firms and a wide range of professional and business services — remain focused on containing costs,” Steven Coutts, Studley’s vice president for research, told Bloomberg via email. “Making space work harder is becoming more widespread.”

Citigroup’s renewal at 388 and 390 Greenwich Street, where the financial firm is relocating its headquarters, was the quarter’s largest deal. [Bloomberg News]Julie Strickland