The space needs of financial and legal services firms that fueled the leasing surge in Midtown in recent years have gone in reverse, as the companies tighten their belts and shed space in the economic downturn.
So far, in the fourth quarter this year, finance companies such as Citigroup and MetLife dumped a total of 1.2 million square feet of sublease space onto the Midtown office market, while law firms returned 230,000 square feet, according to real estate services firm FirstService Williams. The total amount of sublease space returned to the market, including space from companies in other industries, was nearly 2.4 million square feet.
FirstService Williams’ research director Joyce Geiger said companies were shedding space that they had leased in anticipation of expansion, but put the space on the market this quarter to help improve their financial position in the new year.
“All the shadow space and hidden space, it looks like they decided to dump it before the year end to get it into this year’s financials,” she said.
Other financial firms returning sublease space in the quarter included MetLife, which is offering 105,000 square feet at 1095 Avenue of the Americas; Citigroup, which is offering 270,000 square feet at 153 East 53rd Street; and Bear Stearns, which is offering 97,000 square feet at 320 Park Avenue, FirstService Williams data showed.
Legal services firm Cadwalader, Wickersham & Taft returned to the market 40,000 square feet at One World Financial Center; Reed Elsevier is offering 22,500 square feet at 360 Park Avenue South; and Thacher Proffitt & Wood returned 148,000 square feet at Two World Financial Center, the data indicated.
Although the largest blocks of space were from financial services firms, other companies returned space to the market, including the Boy Scouts of America, which is offering 45,000 square feet in sublease space in the Empire State Building, FirstService Williams found.