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Trophy office tower rents near pre-recession highs
Rates on the rise as hedge funds, overseas financial firms boost high-end demand
Rental rates in Manhattan’s choicest office buildings are on the rise, with asking rents nearing pre-recession highs from 2007 and 2008.
In so-called “trophy” buildings, designated as those built or renovated significantly since 1985 with a prominent tenant roster or architectural significance, asking rents hit $76.02 per square foot in the first quarter of 2014, according to A Spring Report From Jones Lang Lasalle Cited By The Wall Street Journal. The rate marks a 3.6 percent increase from the same period last year.
Asking rents in Midtown’s trophy office buildings topped $90 per square foot for the first time since 2008, going for $90.49 per square foot — up 6.4 percent from the first quarter of 2013, according to the report. Rates were milder in Downtown but also on the rise, jumping 5.7 percent to $61.24 in the first three months of 2014.
The number of high-dollar deals in these trophy properties was also on the rise, with 81 transactions at rents of $100 per square foot or more, up from 51 in 2012, the Journal reported. Financial services tenants such as hedge funds and foreign-based firms buoyed the high-end demand, Peter Riguardi, president of Jones Lang LaSalle’s New York tri-state operations, told the Journal. [WSJ, 2nd item] — Julie Strickland