The Daily Dirt: Office market gets confidence boost
Analysis of New York’s top real estate news
Office leasing in Manhattan is up. That doesn’t mean landlords are breaking out the Champagne.
Leasing activity in Manhattan during the third quarter increased an impressive 26 percent from the second, according to Colliers’ latest report.
But — and there always seems to be a but when we talk about glimmers of hope in the office market — availability is 19.4 percent, Jeff Andrews reports. No quick turnaround is coming.
“There will not be one quarter that gets the market from challenged to recovered,” Colliers’ Frank told Andrews. “This will be a process in the market absorbing the additional 43 million square feet of excess space. That’s the size of the entire Financial District.”
More rain on the parade, but at the national level: While office attendance increased after Labor Day, occupancy in major cities remains half of what it was in 2019. Data collected by Kastle Systems pegged average office occupancy in 10 cities at 50.4 percent of 2019 levels in the week that ended Sept. 20, but that rate dropped the following week, the Wall Street Journal reports. (It should be noted that Kastle stats in New York do not include many important buildings because they do not use the company’s card-swipe system.)
Last week news broke that Wells Fargo is doubling down on Far West Side office space, reportedly agreeing to pay $550 million for the retail space vacated by Neiman Marcus at 20 Hudson Yards.
The glass-half-empty view of that deal: Related Companies spent $80 million building out the mall space for the now-bankrupt retailer. It took three years to find a replacement.
The glass-half-full view: The developer was able to lock down a buyer who wants to convert a space into offices, even as others clamor for a chance to convert their office buildings into housing.
A thing we’ve learned: More than two dozen billionaires on the Forbes 400 list derived most of their fortunes from real estate. Irvine Company’s Donald Bren and Related Companies’ Stephen Ross top the smaller list, Jeff Andrews reports.
Elsewhere in New York…
— Mayor Eric Adams is traveling to Mexico, Colombia and Ecuador to deliver an in-person message to would-be migrants: Don’t come to NYC, Politico New York reports. “We want to give people a true picture of what is here,” Adams said Tuesday. “We are at capacity.”
— The city’s new literacy curriculum, known as HMH Into Reading, is being knocked by some teachers and parents as boring, Gothamist reports. “It is not differentiated, it is not culturally responsive and not interesting,” said Martina Meijer, a Brooklyn elementary school teacher.
— Central Park’s Great Lawn was closed early this year because of damage sustained during the Global Citizen Festival, the New York Times reports. The concert was held on Sept. 23 during a storm, and the combination of heavy equipment and attendees traipsing about in a downpour destroyed a third of the lawn, according to the Central Park Conservancy. In 2005, the city proposed banning large protests on the Great Lawn.
Residential: The priciest residential closing Wednesday was $30 million for a condo apartment at 217 West 57th Street in Midtown.
Commercial: The most expensive commercial closing of the day was $8.6 million for a four-unit building at 309 Henry Street in Brooklyn Heights.
New to the Market: The priciest residence to hit the market Wednesday was a townhouse at 14 East 69th Street in Lenox Hill asking $28.5 million. Peter Ashe has the listing. — Jay Young