Office leasing picks up in Midtown but slows elsewhere

Downtown availability rate hits lowest point since 2008

Feb.February 04, 2020 01:45 PM
From left: 110 East 59th Street, The Spiral at 66 Hudson Blvd East and 55 Water Street (Credit: Tishman Speyer, Jack Resnick & Sons)

From left: 110 East 59th Street, The Spiral at 66 Hudson Blvd East and 55 Water Street (Credit: Tishman Speyer, Jack Resnick & Sons)

Midtown accounted for nearly half of Manhattan’s office leasing volume in the first month of the new decade while activity slowed in Midtown South and Downtown.

A total of 3.56 million square feet in Manhattan office leasing deals closed in January, according to the latest market report from Colliers International — a third less than in December and 17 percent below the year-earlier figure.

Midtown’s spurt in leasing activity was led by renewals, as financial services firm Cantor Fitzgerald re-upped for 152,000 square feet at Jack Resnick & Sons and the Ruben Companies’ 110 East 59th Street, while commercial brokerage JLL inked a 143,135-square-foot renewal and expansion deal at 330 Madison Avenue, the 40-story office building that German reinsurance firm Munich RE recently acquired from the Abu Dhabi Investment Authority

The submarket as a whole saw 1.76 million square feet in deals, a 20 percent increase from December.

Although Midtown South’s leasing volume declined by 18 percent to 910,000 square feet in January, it still accounted for the largest deal of the month thanks to Debevoise & Plimpton’s 530,720-square-foot lease at the Spiral in Hudson Yards. The law firm had been bumped to the Tishman Speyer development from Related Companies’ 50 Hudson Yards following Facebook’s mega-lease at the latter office tower a few months ago.

Downtown leasing activity fell from 2.84 million square feet in December to just 890,000 in January. Despite the slowdown, Downtown’s availability rate dropped to 10.3 percent — the lowest since 2008.

The largest lease inked in Downtown in January was by L Brands, the parent company of Victoria’s Secret, which closed on a 219,564-square-foot lease at Retirement Systems of Alabama’s 55 Water Street. L Brands owner Leslie Wexner was reported last week to be considering a sale of the company.

Asking rents rose in all submarkets in January, with Downtown hitting a new record of $65.71 per square foot per year. New, above average–priced space at Zero Irving (the rebranded Union Square tech hub) and Swiss fund AFIAA’s 125 West 25th Street helped push the average asking rent in Midtown South up to $77.14, while the average in Midtown rose just two cents to $85.82.

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