Nonprofits and public organizations took advantage of flat office rents last year to ink big deals, and demand from the sector also helped prop up the otherwise slow commercial sales market.
In 2017, nonprofits and public organizations inked 6 million square feet worth of leases in the city, according to Cushman & Wakefield data cited by the Wall Street Journal. That was an increase of 46.3 percent from 2016. And the average size of a lease was nearly 47,000 square feet, an increase of 76 percent from 2016.
“What we think is happening here is these large players are locking in value rents,” said Cushman managing director Robair Reichenstein.
Financial firms returned to the market in a big way last year, overtaking the technology and advertising sector as the most active tenants when it came to signing leases. Many of those firms inked deals in pricey new office buildings, leaving behind space that remained affordable for nonprofit and government agencies.
And despite a 40 percent drop in the investment sales market last year, nonprofits and public organizations bought and sold a total of $1.2 billion worth of property, maintaining the same level from 2016.
The nonprofit Children’s Aid in February signed a contract to buy a 55,565-square-foot commercial condominium and 10,000 square feet of air rights in Harlem for $45.25 million. [WSJ] – Rich Bockmann