PayPal Inks Deal For Hudson Square Office

PayPal is paying attention to the rising tide of Manhattan’s office leasing sector.

The digital commerce platform signed a lease for 261,000 square feet at 345 Hudson Street in the Hudson Square neighborhood, the New York Post reported. The 10-year lease was quietly put together before the end of last year.

Financial details of the lease were not disclosed. PayPal is expected to occupy three floors of the building when it moves in next year, though it’s unclear what will happen to its space at 95 Morton Street.

The building is owned by a joint venture of Hines, Trinity Church Wall Street and Norges Bank Investment Management. Other tenants at the building include Audacy, Lerer Hippeau Ventures, Hines and Fanatics, which signed a lease for 54,000 square feet last year.

The 17-story, 980,000-square-foot property at 345 Hudson is facing a delicate moment. While boasting a prominent tenant roster, Google is in the process of trying to sublease 165,000 square feet as it consolidates around St. John’s Terminal. A year after that effort began, there’s been no indication of Google finding a taker for the space.

More than 400,000 square feet was available at 345 Hudson Street prior to the Fanatics deal, according to CBRE marketing materials. The average asking rent in Hudson Square and the Meatpacking District in the first quarter was $99.13 per square foot, according to Newmark, a big jump year-over-year; the availability rate was 21.3 percent, one of the highest rates of any neighborhood in Manhattan.

Manhattan office leasing reached pre-pandemic levels in the fourth quarter, posting its strongest quarter since late 2019. That fed into a yearly total of nearly 42 million square feet, the highest for a year since 2019.

Increased demand resulted in tightening market conditions. The availability rate fell to 13.9 percent and the average asking rent climbed to $76 per square foot.

— Holden Walter-Warner