Midtown has more than 80 blocks of massive and very available office space

Figure represents a 60% increase since '07

TRD New York /
Jan.January 29, 2016 03:38 PM

There are more large office blocks available in Midtown now than at any time in recent history, and landlords who don’t want to watch their spaces linger will have to get creative.

That’s according to a new report by Newmark Grubb Knight Frank identifying more than 80 blocks of 100,000-plus square feet of available space in Midtown, a 60 percent increase over the number of spaces available at the peak of 2007.

“If we take a snapshot of the Midtown office market right now with an eye to the not-too-distant future, it’s hard not to be aware of the significant amount of space that has recently or will soon come to market,” the report states.  “While commercial real estate is a constant game of musical chairs, the significant movement to new construction is a different variable, last seen in abundance during the 1980s.”

With landmark projects such as Hudson Yards and Brookfield Place coming to life, Manhattan is expected to add at least 12.5 million square feet of new product over next five years. According to the report, 30.5 percent of that space has already pre-leased, and relocating tenants are expected to leave some 3.8 million square feet of vacant space behind.

Not only are tenants opting out of Midtown for new construction on the Far West Side and Lower Manhattan, they’re also backfilling large blocks in Midtown South And Below Canal Street.

In all, Newmark is tracking more than 80 blocks of space 100,000 square feet and greater that either are available or will become available in the near future. That’s compared to 50 blocks the firm was tracking back in 2007.

At greatest risk, according to Newmark’s analysis, are landlords in the Sixth Avenue submarket, where 17 buildings are expected to have a combined 10 million square feet of available space. Time Inc., for example, is leaving 670,000 square feet behind at 1271 Sixth Avenue as it relocates to Brookfield Place in Lower Manhattan (Major League Baseball is reportedly talks to replace the publisher at the Time & Life Center), and HBO is vacating large blocks at 1100 and 1114 Sixth Avenue as it relocates with parent company Time Warner to Hudson Yards.

 

Savvy property owners would be wise to reposition their buildings in the hopes of attracting TAMI tenants, which in 2015 saw a 71 percent uptick in expansions over the prior year, and are experiencing annual employment growth of 5.4 percent, dramatically more than seen in the finance sector.

“Some building owners planning to market large amounts of available space in the coming years have begun taking measures to reposition assets, including: assigning a new property name (5 Manhattan West) . . . [and] completely reimagining their structures (390 Madison Avenue and 425 Park Avenue),” Newmark’s researchers wrote.


Related Articles

arrow_forward_ios
Director of Research & Analytics for CBRE Tri-State Nicole LaRusso, Vice Chairman & Director at Savills David Goldstein, and President of Newmark Knight Frank's Tri-State region David Falk

“For years we all laughed at them”: office brokers warm to virtual tours

“For years we all laughed at them”: office brokers warm to virtual tours
Director of Research & Analytics for CBRE Tri-State Nicole LaRusso, Vice Chairman & Director at Savills David Goldstein, and President of Newmark Knight Frank's Tri-State region David Falk

How to open up our offices on tonight’s TRD Talk

How to open up our offices on tonight’s TRD Talk
TSCG and SCG Retail's David Firestein, Meridien Retail Leasing's James Famularo and Newmark Knight Frank's Jeffrey Roseman

How to restart retail on today’s TRD Talk

How to restart retail on today’s TRD Talk
“Be very careful what you ask for,” top broker warns borrowers seeking relief

“Be very careful what you ask for,” top broker warns borrowers seeking relief

“Be very careful what you ask for,” top broker warns borrowers seeking relief
Barry Gosin, Sandeep Mathrani and Christian Ulbrich

WeWork taps JLL, Newmark to help negotiate rent relief

WeWork taps JLL, Newmark to help negotiate rent relief
From left: Realogy's Ryan Schneider, Cushman & Wakefield's Brett White and Newmark Knight Frank's Barry Gosin (Credit: iStock)

Brokerage stocks plunge amid market turmoil

Brokerage stocks plunge amid market turmoil
125 Park Avenue (Credit: Google Maps, iStock)

Newmark hires nurse to screen visitors, employee tests positive for Coronavirus

Newmark hires nurse to screen visitors, employee tests positive for Coronavirus
Fears of coronavirus have led some of the world’s most prominent commercial real estate companies to pull out of the MIPIM conference in Cannes, France. (Credit: Getty Images, iStock)

Coronavirus exodus: CRE bigwigs ditch MIPIM

Coronavirus exodus: CRE bigwigs ditch MIPIM
arrow_forward_ios

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

Loading...