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:
“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.