Microsoft is the latest tech giant to snap up space in Manhattan’s office market, leasing half of Bromley Companies’ 122 Fifth Avenue.
The company signed on for 150,000 square feet at the Flatiron building, half of its total 300,000 square feet, Bloomberg reports. Asking rents were not revealed for the development, which is under renovation, and it’s currently unclear when Microsoft would move in.
JLL represented Microsoft in the transaction, while Newmark represented the landlord, according to Bloomberg.
The tech firm is betting on the New York City office market despite its own unclear plan to bring employees back to in-person work. In September, Microsoft abandoned its plan to fully reopen its offices on Oct. 4 and hasn’t yet set a new target date for an in-person return.
But the city’s office market appears to be poised to heat up on the heels of
The market value of office buildings in the city dropped by $28.6 billion — 16.6 percent — during the last fiscal year, per a report from the state comptroller. However, the office market has seen promising signs in recent months, like Google’s $2.1 billion buy of St. John’s Terminal in September.
The purchase marked the priciest for an office property since the onset of the pandemic and sparked optimistic reactions about how the market, and city at large, will recover from its struggles during the pandemic.
“This purchase is a further signal to those smaller tech companies that the large tech companies are doubling down on office space,” Savallis’ Zev Holzman told The Real Deal of Google’s multi-billion dollar buy. “And I think that is a very positive message for the market overall.”
New York City is not the only region where Microsoft is pushing for more office space, seemingly ebbing against a shaky market. The tech giant recently leased nearly 50,000 square feet for its regional headquarters at an office tower being developed in Miami’s Brickell Financial District.
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[Bloomberg] — Holden Walter-Warner