Manhattan’s office market continues to struggle, but that doesn’t mean some tenants aren’t betting on the city’s recovery in a major way.
Not-for-profit health care system MJHS signed a lease for more than 138,000 square feet at 55 Water Street, the New York Business Journal reported. According to CBRE, it’s the largest new lease in lower Manhattan in the last 18 months.
The lease is for 30 years, according to the Business Journal. Financial terms of the lease were not disclosed.
The health system plans to consolidate most of its Brooklyn offices, along with its current Manhattan location, into its two-floor footprint at the Financial District building. The organization, which offers various health services to individuals, will be reducing its overall footprint by 20 percent, but maintain a presence in Brooklyn and Garden City.
The organization settled on the building to improve quality of life and access to public transportation for employees, MJHS Health System CEO David Wagner told the outlet. Wagner also said the organization was able to get favorable terms due to the pandemic.
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The Retirement Systems of Alabama, owner of 55 Wall Street, was represented by a CBRE team including Howard Fiddle and Brad Gerla in the lease. MJHS was represented by a CBRE team including Chris Mansfield and Harly Stevens.
MJHS’ deal comes around six months after another tenant signed a major sublease deal for roughly the same amount of space at 55 Water Street. Fintech firm DailyPay inked a 137,000-square-foot sublease on a 12-year term from space leased by S&P Global. The company planned to move its headquarters in early 2022.
Despite these big deals, Manhattan’s office market is still struggling. The availability rate in the borough hit 19 percent during the first quarter, the highest availability rate recorded by Savills going back to 2000.
The picture is even more dire in the Financial District. More than 25 percent of the neighborhood’s offices are reportedly available to rent, up from 17 percent a year ago.
[NYBJ] — Holden Walter-Warner