The Real Deal New York

Wall Street, insurance tenants drove office leasing in 2017

FIRE sector returns to the forefront after years playing second-fiddle to tech industry
January 08, 2018 10:00AM

50 Hudson Yards and 61 Ninth Ave

Fast-growing tech companies have driven office leasing over the past few years, but in 2017 it was Manhattan’s traditional tenants that returned to the driver’s seat.

Financial services, insurance and real estate tenants, known by the acronym FIRE, completed 13 relocation or expansion deals over 100,000 square feet last year, according to CBRE figures reported by the Wall Street Journal. That’s the most in a decade.

FIRE tenants inked 3 million square feet of large deals over 100,000 square feet, nearly three times as much as the 1.1 million square feet they did in 2016.

“For the first time in a really long time, there was a variety of choices, of buildings that were brand new or made to be like brand new,” CBRE tri-state CEO Mary Ann Tighe told the Journal. “We had people who had been reluctant to spend, but when they decided to spend they were going to put their money in a place that was going to support technology and their workforce.”

Record highs for stock market indexes, hiring among financial firms and an abundance of options for new or renovated buildings helped driving leasing activity among the group.

Manhattan’s financial-services sector hit employment of 476,700 jobs in November, according to Cushman & Wakefield principal economist Ken McCarthy. That seasonally adjusted figure is well below FIRE’s 1990 count of roughly 530,000 jobs, but still represents strong growth as the sector added about 12,700 jobs last year through November.

Asset manager BlackRock inked an 850,000-square-foot deal at 50 Hudson yards, and insurer Aetna signed a lease for 145,000 square feet at Vornado Realty Trust and Aurora Capital Associates’ 61 Ninth Avenue in the Meatpacking District. [WSJ]Rich Bockmann