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Labor Day may not have brought the surge in office occupancy that landlords had hoped for, but leasing activity in Manhattan has finally begun ticking upward again in recent months.
Tenants signed leases for more office space in August than in any month since January 2020, and availability shrank to 16.7 percent, its lowest rate in 15 months. Last month, it dropped to 16.4 percent, matching the availability rate recorded in March 2021.
Though the data spells some much-needed optimism for the market, the largest lease signed in August represented a downsizing — an example of the difficulties landlords are likely to face as major tenants rethink their office needs.
Big Four accounting firm KPMG topped the list, signing a 20-year deal for 456,000 square feet at Brookfield Properties’ 2 Manhattan West near Hudson Yards. But the deal will consolidate the financial giant’s existing 800,000 square feet of space across Rudin Management’s 345 Park Avenue and 560 Lexington Avenue and SL Green’s 1350 Sixth Avenue.
Brookfield was represented by an in-house team including Jeremiah Larkin and Duncan McCuaig, as well as by Cushman & Wakefield. A CBRE team including Michael Geoghegan and Lewis Miller represented KPMG.
The month’s second largest lease was at Silverstein Properties’ 3 World Trade Center, where London-based law firm Freshfields Bruckhaus Deringer inked a 15-year deal for 180,000 square feet.
This deal was an expansion: Freshfields is leaving behind a smaller space at Boston Properties’ 601 Lexington Avenue for its new location downtown, where the asking rent was over $100 a square foot, according to Commercial Observer.
Silverstein was represented in-house by Jeremy Moss and by a CBRE including Mary Ann Tighe and Ken Meyerson. Savills’ David Goldstein and Jarod Stern represented the tenant.
Third on the list was public relations firm Edelman, which renewed its 173,600-foot lease for another 15 years at Jack Resnick & Sons’ 250 Hudson Street in Hudson Square.
Since Edelman moved into the space more than a decade ago, the landlord has undertaken $40 million worth of renovations to the building, whose other tenants include Bed Bath & Beyond, Gluckman Tang Architects and TMRW Life Sciences.
Jack Resnick & Sons was represented in-house by Adam Rappaport and Brett Greenberg while a CBRE team including Tighe and Meyerson handled the tenant side.
At fourth on the list, real estate investment firm Cohen & Steers signed a 15-year lease for two floors at Marsh & McLennan’s 1166 Sixth Avenue office tower.
The firm took 160,700 square feet of space, which was reportedly asking $87 per square foot, plans to move in for the fourth quarter of 2023 from SL Green and Vornado Realty Trust’s 280 Park Avenue, where it’s been since 2005.
A CBRE team including Geoghegan and Michael Wellen represented the tenant, while a Newmark team including David Falk and Andrew Sachs represented Marsh & McLennan.
Rounding out the top five is 620 12th Avenue in Hell’s Kitchen, where Verizon took 144,000 square feet and nearly the entire four-story building owned by Edison Properties and its subsidiary HLP Properties.
The lease reportedly lasts for 48 years and will cost the telecom provider $50 million. Verizon’s plans for the space are not known.
Note: Top office leases and deal sheet data are manually collected from The Real Deal and third-party sources. It is not a comprehensive list. Please contact tips@therealdeal.com to notify of any missing deals.