At the very top of the Midtown office leasing market, companies continue to push rents up.
“What is really buoying [Midtown] is the top of the market,” Kraut said.
The investment firm Icahn Enterprises completed a 27,808-square-foot deal at the General Motors Building at 767 Fifth Avenue that had the most expensive starting rent since 2008, according to a little-noticed survey released last month by commercial firm Jones Lang LaSalle.
The deal was signed in the first quarter for $178 per square foot, the JLL survey found. That topped 2011’s high watermark: a $175-per-square-foot lease signed by home builder Hovnanian Companies in the same building.
Meanwhile, the Carlyle Group, the global asset management group, signed the fifth-priciest lease in 2012’s first quarter, according to the JLL survey. The company took 23,411 square feet at 520 Madison Avenue, with a rent starting at $122 per square foot.
But even as blocks of space have been spoken for in Midtown in the last few months — by Viacom, Icahn and the Carlyle Group — other spaces have been put back on the market.
Building owner Vornado Realty Trust listed two entire floors last month, totaling 188,814 square feet, at 100 West 33rd Street. The space was formerly occupied by Bank of America, a spokesperson for the lender said. There was no asking rent provided.
Overall, asking rents in Midtown ticked up by $0.16 per square foot to $61.01 per foot last month, while the availability rate remained flat at 11.1 percent, Cassidy Turley statistics show.
Even as large finance firms like Bank of America were moving out of buildings in Midtown, some high-powered (although smaller staffed) financial companies were taking space in Midtown South — largely to be closer to the tech and multimedia firms they often bankroll.
Bain Capital Ventures — the venture capital affiliate of private equity firm Bain Capital, cofounded by presumptive GOP presidential nominee Mitt Romney — inked a 3,500-square-foot deal on the eighth floor of 632 Broadway. The local office for the private equity firm Bain Capital remains at 590 Madison Avenue in Midtown, a spokesperson for the company said.
Nora Stats, the president of Tarter Stats O’Toole, which represents the landlord at the 12-story 632 Broadway, declined to comment on the Bain deal. But she said other financial firms have moved to the building, including hedge fund Serengeti Asset Management. And, she noted, Boston-based venture capital fund, Spark Capital, recently took the top floor at the nearby 138 Spring Street in Soho.
“They want to be near the tech companies,” she said, adding that the money managers who work at the financial firms also want to be near their homes in Soho and Tribeca.
Meanwhile, in the Meatpacking District, sources said fashion brand Alexander McQueen is expected to lease space in 22 Little West 12th Street at about $60 per square foot.
Jared Epstein, a vice president at Aurora Capital Associates, has been analyzing potential development options in the Meatpacking District.
“The freshest new retail concepts are in the neighborhood,” he said. “Where else would you want to be if you are an aspirational retailer?”
Overall, the Midtown South asking rent rose in April to $44.23 per square foot, up $0.54 per foot. The availability rate fell by 0.4 points to 8.6 percent, Cassidy Turley statistics showed.
Morgan Stanley’s Downtown deal provided a huge boost to the market.
It included an 816,000-square-foot renewal, plus a 337,000-square-foot expansion. The latter lease does not begin until October 2013, CoStar data showed.
Despite growing its footprint in the 50-story, 2.5 million-square-foot 1 New York Plaza, the availability rate in the tower remained high — with a block of nearly 415,155 square feet on the market, all of it above the 42nd floor, CoStar showed.
Downtown was the only market where asking rents declined last month, Cassidy Turley figures showed. The average asking price fell by $0.71 in April to $38.08 per square foot. However, in a sign the market was tightening, the availability rate fell by 0.2 points to 10.8 percent, the firm reported.
Avison Young’s Kraut, speaking about Manhattan overall, said landlords were getting nervous about larger blocks on the market.
“Big blocks tend to drive the market. So some of the bigger landlords with lots of space in the bottom of the buildings are getting nervous now,” he said. But not nervous enough to pare back rents.
“You don’t see much price-cutting at all. But there may be additional incentives,” Kraut said.