Midtown South leads Manhattan’s office market recovery: report

New York /
Oct.October 12, 2021 01:47 PM

(iStock)

Is Manhattan’s office market recovering? Depends where you look.

Its comeback in the months ahead will vary widely from one submarket to the next, according to an analysis by KPG Fund and Newmark.

During the third quarter, prospective tenants were looking for 6.5 million square feet of office space in Midtown South, which includes Chelsea, Flatiron, Hudson Square, the Meatpacking District and NoHo/SoHo — up a robust 64 percent from the first quarter of this year, according to the analysis.

On the other hand, demand for office space declined in Downtown East as well as in Midtown neighborhoods including Murray Hill, Park Avenue and the Plaza District. In Murray Hill, for example, prospective tenants collectively looked for 230,000 square feet of office space in the third quarter, down 29 percent from the first quarter.

The report did not offer year-over-year comparisons.

Office demand figures serve as an indicator of future leasing activity, said Greg Kraut, CEO of KPG, which specializes in modernizing mid-market office buildings.

Kraut noted that tech and media companies aiming to attract talent are driving office demand in Midtown South because they believe young professionals want to be where they can live, work and play.

Midtown South has already been the choice of Google, which last month announced its intention to exercise a $2.1 billion purchase option for its 1.3-million-square-foot leased office building at 550 Washington Street in Hudson Square.

In addition to Midtown South, Midtown neighborhoods just north of Chelsea also had more tenants looking for space, according to the analysis. Office demand in the Penn District more than doubled in the third quarter, to 1.7 million square feet, from the first quarter of this year. The area’s major tenants include Facebook, which last year signed a 730,000-square-foot lease at Vornado Realty Trust’s Farley Post Office redevelopment.





    Related Articles

    arrow_forward_ios
    Stripes founder Ken Fox and a rendering of 40 10th Avenue (Stripes, Neoscape)
    Private equity firm carves out 14K sf at Aurora’s Solar Carve building
    Private equity firm carves out 14K sf at Aurora’s Solar Carve building
    CRE held up through the pandemic far better than most expected (iStock)
    How commercial real estate survived the pandemic
    How commercial real estate survived the pandemic
    Harbor Group grabs $558M in financing for Black Rock purchase
    Harbor Group grabs $558M in financing for Black Rock purchase
    Harbor Group grabs $558M in financing for Black Rock purchase
    iCapital Network CEO Lawrence Calcano and 60 East 42nd Street (iCapital, ESRT)
    Fintech firm doubles down at ESRT’s One Grand Central
    Fintech firm doubles down at ESRT’s One Grand Central
    15 Farm Springs Road, Farmington, CT and The Boulevard in Yaphank, LI
(Google Maps, TheBoulevardNY.com)
    Connecticut, Long Island projects show how pandemic has changed real estate
    Connecticut, Long Island projects show how pandemic has changed real estate
    New Jersey’s office market hits wall in third quarter
    New Jersey’s office market hits wall in third quarter
    New Jersey’s office market hits wall in third quarter
    How NYC’s top real estate law firms got creative in an unusual year
    How NYC’s top real estate law firms got creative in an unusual year
    How NYC’s top real estate law firms got creative in an unusual year
    Office workers in major cities reach pandemic-best return rates
    Office workers in major cities reach pandemic-best return rates
    Office workers in major cities reach pandemic-best return rates
    arrow_forward_ios

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

    Loading...