While the investment-sales market slogged through 2017 and sellers slashed prices on residential properties, Manhattan’s office-leasing market stood tall. Tenants flocked to get deals done – particularly in new buildings on the Far West Side and in Lower Manhattan – pushing leasing volumes ahead of last year’s figures.
In fact, half of the year’s Top 10 most valuable office leases were inked at Hudson Yards and Manhattan West, according to data compiled by CompStak for The Real Deal. It should come as little surprise that the West Side dominated so, considering the record year the neighborhood had.
Tenants inked 2.2 million square feet worth of deals on the Far West Side as of October, making 2017 by far the most successful year for leasing. (The leasing total for 2016 came in a just a hair shy of 1 million square feet.) Companies like asset manager BlackRock, which inked a megadeal that will allow construction to begin at 50 Hudson Yards, joined firms like EY, Amazon and Accenture that inked pricey deals to fill buildings at Manhattan West.
That’s not to say the old guard was left in the dust. The General Motors Building, which, despite Manhattan’s shift westward sits at what can still be considered the most desirable corner on the island, notched the second-most expensive lease of the year. And Lower Manhattan got in on the action, with Spotify’s deal at 4 World Trade Center and the Royal Bank of Canada’s big renewal at Brookfield Place.
Here’s a look at the office leases signed in 2017 that will bring the most bank to their landlords during the length of the deals:
50 Hudson Yards
The Related Companies, Oxford Properties Group and Mitsui Fudosan America signed BlackRock, the world’s largest asset manager, as the anchor tenant for their 50 Hudson Yards office tower, which at 2.9 million square feet will be the largest building at their Hudson Yards megadevelopment.
The 847,000-square-foot lease, which begins in 2023, will allow BlackRock to consolidate offices from Park Avenue, and runs for a term of 20 years. The starting rent was in the low $90s per square foot, according to CompStak.
2) Estee Lauder
767 5th Avenue
Estee Lauder in late 2015 hired CBRE as an advisor while it considered relocating from its longtime home at the General Motors Building when its lease expires in 2020.
But in the end, the storied cosmetics company decided to stay put and renew with landlord Boston Properties. The 300,000-square-foot deal had the highest starting rent among the year’s 10 priciest leases, beginning in the low $120s per square foot.
*New York Presbyterian this year bought a leasehold condo interest covering 500,000 square feet at Rxr Realty And Walton Street Capital’s 237 Park Avenue. Had the deal been structured as a lease, it would have been valued at $1 billion, earning it the No. 2 spot among the year’s most valuable leases.
1 Manhattan West
“Big Four” accounting firm EY inked a deal to ditch its Times Square home at RXR Realty’s 5 Times Square for a new headquarters at Brookfield Property Partners’ 1.8 million-square-foot 1 Manhattan West, the first of two new office towers the developer plans for the site.
The 604,295-square-foot deal is the largest yet at the tower, which also counts the National Hockey League, law firm Skadden, Arps, Slate, Meagher & Flom and the consulting firm Accenture – another one of 2017’s megadeals – as tenants. The starting rent was in the mid $80s per square foot.
4) Sidley Austin
787 7th Avenue
The international law firm, which moved to the 1.7 million-square-foot 787 Seventh Avenue in the wake of the September 11 terrorist attacks, inked a 20-year renewal for 347,672 square feet. The deal, which runs through 2037, had a starting rent in the mid $80s per square foot.
5 Manhattan West
It’s not HQ2, but the Big Apple still landed a big deal with Amazon when the e-commerce company inked a 347,672-square-foot lease with Brookfield at 5 Manhattan West. The 1.8 million-square-foot building, which fronts an entire superblock along 10th Avenue between West 31st and 33rd streets, was in the running for the title of the ugliest building in New York before Brookfield stripped its bleak façade and replaced it with floor-to-ceiling windows.
With new outdoor spaces and a Whole Foods on the way, the building is home to two of the year’s priciest office leases.
See more 2017 year end reviews here
1 Manhattan West
Back at 1 Manhattan West, the business and technology consulting giant Accenture inked a 15-year lease covering 248,673 square feet. And the space covering the top eight floors of the tower doesn’t just come with sky-high views, but also a lofty price: The deal came with a rent starting in the high $110s per square foot, according to CompStak.
7) NYC Human Resources Administration
109 East 16th Street
Despite reports earlier this year that the de Blasio administration had put a freeze on long-term lease deals, the city’s Human Resources Administration inked a 349,777-square-foot renewal at Gould Investors’ 109 East 16th Street in Gramercy Park.
The 20-year renewal had a starting rent in the mid $40s per square foot.
8) JMPC Digital
5 Manhattan West
In the second deal on this list at 5 Manhattan West, JPMorgan Chase tripled its footprint in the building with a 305,365-square-foot lease for its digital group. The bank expanded its office space from 125,000 square feet to 428,000 square feet – enough space to accommodate 2,000 to 2,500 employees.
The 15-year deal had a starting rent in the low $90s per square foot.
4 World Trade Center
In a blockbuster deal that got Gov. Andrew Cuomo to display his embarrassing Spotify playlist, the streaming-music company signed a 15-year, 378,814-square-foot lease at Silverstein Properties’ 4 World Trade Center with a starting rent in the mid $70s per square foot. Spotify later in the year signed up for an additional 100,000 square feet – a deal that brought the tower to full occupancy – but CompStak counts the deals as separate leases.
10) Royal Bank of Canada
200 Vesey Street
The Canadian lender’s lease at Brookfield Place wasn’t coming due until 2022, but the bank decided to re-up with Brookfield early.
The 15-year renewal covers 402,000 square feet, with a starting rent in the high $50s per square foot.