Banks are following the money to Midtown South

Leasing spikes in subdistrict as financial firms look to be closer to clients

New York /
Oct.October 03, 2016 12:14 PM

Financial firms have been increasingly inking office leases in Midtown South this year in order to be close to the technology tenants that dominate the trendy market.

So far this year, banking industry companies have leased 255,000 square feet in Midtown South compared to 170,750 square feet all of last year, according to Cushman & Wakefield data cited by Bloomberg.

Office leasing by financial firms spiked to 23.1 percent of all deals in the submarket during the third quarter, up from 10.3 percent during the previous three months.

Firms like Silicon Valley Bank, which signed a deal for 20,000 square feet at TF Cornerstone’s TRData LogoTINY 387 Park Avenue South in July, are making the move from more traditional banking areas in order to be close to those companies they do business with.

“There are synergies, both from being near clients and it’s a cool neighborhood,” said TF Cornerstone senior vice president Jake Elghanayan.

Silicon Valley Bank is leaving Stawski Partners’ 505 Fifth Avenue as it relocates near Madison Square Park.

“We’re happy with our space in Midtown — it’s on the corner of 42nd and Fifth, it overlooks the library and Bryant Park — but our location is not providing our business with any particular advantages,” said Silicon Valley’s New York market manager Melissa Stepanis. “We work with a vibrant group of entrepreneurs and investors involved in the technology space, and there’s just an energy that these types of clients bring, and they’re clustered in the Flatiron, Madison Square Park area.”

Before the recent spike, the financial industry took up no more than 6.7 percent of the space in Midtown South. But industry watchers don’t expect the Flatiron and Plaza districts to go all freaky Friday anytime soon.

“What you’re seeing is just a more diversified market,” said Mike Mathias, a leasing broker a Savills Studley. “The future of the world is everything is going to have a tech component. There’s a premium people are willing to pay to be there.” [Bloomberg]Rich Bockmann

 

Related Articles

arrow_forward_ios
Photo illustration of RXR Realty CEO Scott Rechler (Getty, iStock)
Office landlords offer no-wait Covid tests to lure workers back
Office landlords offer no-wait Covid tests to lure workers back
Rudin Management's Bill Rudin, 1675 Broadway and Gannett CEO Mike Reed (Getty, Google Maps, Gannett)
Gannett to move its NYC office two blocks north
Gannett to move its NYC office two blocks north
HSBC COO John Hinshaw (Getty, iStock)
HSBC to shrink its office footprint amid shift to WFH
HSBC to shrink its office footprint amid shift to WFH
Columbia Property Trust CEO Nelson Mills and renderings of 799 Broadway. (Columbia, 799 Broadway)
Columbia Property Trust’s rent collection stays steady in Q4
Columbia Property Trust’s rent collection stays steady in Q4
Tony Malkin (Getty, iStock)
Empire State Realty Trust reports 97.5% drop in Q4 earnings
Empire State Realty Trust reports 97.5% drop in Q4 earnings
(iStock)
Big companies delay returning to offices — again
Big companies delay returning to offices — again
Vornado's Steve Roth, 555 California Street in San Francisco and Donald Trump (Getty, Wikipedia Commons)
Vornado, Trump Org lock in big renewals at SF office tower
Vornado, Trump Org lock in big renewals at SF office tower
SL Green's Marc Holliday and Brookfield Asset Management's Bruce Flatt with Tower 46. (SL Green, Brookfield)
SL Green to sell its 25% stake in Tower 46 to Brookfield
SL Green to sell its 25% stake in Tower 46 to Brookfield
arrow_forward_ios

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

Loading...