Eighth Avenue booms with Class A office development

More than 3 million square feet of commercial space have been added in the last 10 years

New York /
Nov.November 16, 2015 10:09 AM

Updated: 1:45 p.m., Nov, 16: High-end office buildings are rising at a rapid clip along the west side of Midtown, and developers say more projects might be in the offing.

More than 3 million square feet of commercial space have been added in the last 10 years on a stretch of Eighth Avenue Between West 40th Street and Columbus Circle.

The vacancy rate for Class A office space in the area stood at 6.1 percent in the third quarter of this year, compared to a rate of 9.8 percent in Midtown, according to JLL.




Behind the story:

11 Times Square

“It’s one of the few Midtown places where you can actually still assemble a site with a decent-size footprint and expect to get the sort of rents you need for an office building or the sales prices for residential condominiums,” CBRE’s Mary Ann Tighe told the Wall Street Journal.

Recent major projects in the area include Boston Properties’ million-square-foot 250 West 55th Street, as well as SJP Properties’ 1.1 million-square-foot 11 Times Square, where Norges Bank recently bought a stake.

Starting Rent For High End Space On Eight Avenue rose from $49.56 per square foot in 2010 to a robust $91.83 per square foot today, an increase of 85 percent, according to JLL. In Midtown, rents increased by only 33 percent, from $62.39 to $82.87.

Still, not everyone’s convinced. Mitchell Moss, a professor of urban planning at New York University, told the Journal that commercial development in the area was being driven by site-specific factors and didn’t necessarily indicate future growth. Rather, he said, development would focus on the Ninth and Tenth avenues and around Hudson yards.

“It’s a place for nonluxury hotels and middle-class tourists,” Moss said. “There is no reason why every piece of Manhattan has to look like Park Avenue.” [WSJ]Ariel Stulberg

Correction: A previous version of this article stated that Bill Ackman’s Pershing Square Capital Management had taken 49,000 square feet at 250 West 55th Street. In fact, while the company had reportedly been in talks to take the space last Spring, new reports over the summer said that the negotiations had broken down. 


Related Articles

arrow_forward_ios
An aerial of 341-347 Madison Avenue and Boston Properties CEO Owen D. Thomas (Google Maps, Real Estate Roundtable)
Boston Properties moves forward with teardown of ex-MTA HQ
Boston Properties moves forward with teardown of ex-MTA HQ
135 West 29th Street and Kaufman Organization CEO Edward Hart (Google Maps, Kaufman)
Kaufman Org closes on $35M ground lease deal
Kaufman Org closes on $35M ground lease deal
425 Park Avenue and L&L’s David Levinson (Photos via 425 Park Ave, L&L)
After 2-year drought, 425 Park Ave snags new tenant
After 2-year drought, 425 Park Ave snags new tenant
R&B Realty's Aron Rosenberg and Maverick's David Aviram of Maverick with 28 West 36th Street and 32 West 39th Street (Google Maps)
Midtown landlord sues to stop foreclosure by Maverick
Midtown landlord sues to stop foreclosure by Maverick
11 Penn Plaza and Apple CEO Tim Cook (VNO; Getty)
Apple snags more space at Vornado’s 11 Penn Plaza
Apple snags more space at Vornado’s 11 Penn Plaza
A photo illustration of SL Green's Marc Holliday (Getty; iStock; SL Green)
NYC offices get creative to lure workers back
NYC offices get creative to lure workers back
Airbnb's Brian Chesky and Bill Ackman (Getty)
Bill Ackman on Airbnb: “I wouldn’t use the word rebuff”
Bill Ackman on Airbnb: “I wouldn’t use the word rebuff”
Keith Meister and Bill Ackman (Credit: Meister by Patrick McMullan/Patrick McMullan via Getty Images, Ackman by Sylvain Gaboury/Patrick McMullan via Getty Images, iStock)
Activist investors dive in as real estate stocks tank
Activist investors dive in as real estate stocks tank
arrow_forward_ios

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

Loading...