Third Avenue — once the last resort for New York’s office tenants — is gaining in popularity due to the city’s improving office market.
The availability rate of the area through September dropped to 10.7 percent from 13.4 percent at the end of 2013, according to CBRE data reported by the Wall Street Journal. Midtown’s overall availability rate was 11.1 percent. During the same period, rents on Third Avenue rose to $59.90 per square foot from $57.45 per square foot.
“The time of $40 rents has gone,” Giacomo Barbieri, head of real estate acquisitions in the Americas for TIAA-CREF and a landlord of buildings in the area, told the newspaper.
Law firms, insurance companies and private equity firms that would usually have looked at the pricier Sixth, Madison or Park avenues are now settling on Third Avenue.
Still, bargains can still be found on the corridor.
Six deals for more than 37,000 square feet — and that were transacted since December — included an average of 12 months of free rent . Those deals also included roughly $70 per square foot paid by landlords for improvements to the spaces, Richard Persichetti, vice president at Cassidy Turley, told the newspaper. In comparison, Midtown incentives usually include about six months of free rent and between $50 and $60 of space improvements per square foot. [WSJ] — Claire Moses