Hudson Yards
Hudson Yards

How was the commercial real estate market in 2019? Depends on which market. The office leasing sector was hot in 2019 with large tech deals like Facebook’s 1.5 million-square-foot lease at Hudson Yards and Google’s 1.3 million-square-foot deal in Hudson Square helping to drive a record year for office leasing.

In fact, Manhattan saw its most active year for office leasing since 2001 last year, according to Colliers International. The market recorded 42.97 million square feet of new leases and renewals in 2019, up 2.9 percent from the previous year.

The same exuberance, however, wasn’t experienced across the board in commercial real estate. The investment-sales market slogged through another year of declining activity. Manhattan saw just 199 deals close for a total of $23.2 billion, according to Colliers. That was down roughly a third from 2018’s total of $34.7 billion worth of sales, spread across 263 transactions.

While Manhattan notched some big-ticket deals like WarnerMedia’s $2 billion sale-leaseback of its 30 Hudson Yards office condo to the Related Companies, 2019 was weighed down by the multifamily market, which nearly ground to a halt as the state imposed new laws on rent regulations that made it more difficult for investors to increase rents.

Of course, most property owners have the luxury of deciding whether or not they want to sell. But when it comes to debt, owners’ hands are more or less tied by expiration dates.

Nationwide, commercial and multifamily loan originations were up 15 percent through the first three quarters of 2019, according to the Mortgage Bankers Association.

New York’s largest finance deals of 2019 include the Bank of America-led $1.6 billion refinance of the Durst Organization’s One Bryant Park Tower and a $1.43 billion CMBS loan originated by Deutsche Bank to finance Related’s purchase of WarnerMedia’s Hudson Yards condo.

And finally, the retail market saw some signs of life, even amid a barrage of retailer bankruptcies, like Forever 21 and Barneys.

Manhattan leasing activity for the 12-month period ending in the third quarter totaled 3.7 million square feet, up from 3.3 million square feet during the same time period a year earlier, according to CBRE.

One of the factors contributing to the increase in activity was the continuing decline in asking rents. According to CBRE’s data, the average asks for Manhattan’s 16 main retail corridors fell nearly 6 percent in the third quarter from the previous year to $756 per square foot.