The Daily Dirt: A bright spot in the Plaza District?

Surprise! Office in NYC is still not what it used to be. But the Plaza District had a decent quarter.

An old-fashioned Boolean search of “Plaza District” AND “Office” turns up a series of headlines over the last few years declaring the ups and downs of the area as a hot or not-so-hot office submarket. A number of defaults, downgrades and foreclosures made headlines last year.

In the last quarter, however, the district accounted for more than 30 percent of Manhattan’s leasing volume, my colleague Elizabeth Cryan reports.

Last month, Blackstone reportedly extended its lease at Rudin Management’s 345 Park Avenue for six more years and increased its space there from 750,000 to 1 million square feet. Industrious inked a 10-year deal to occupy 16 floors of 12 East 49th Street (WeWork’s former headquarters). Those were the largest new office leases in the city last month.

For the first half of the year, leasing volume hit 14.5 million square feet, representing a 16 percent increase from the same period last year, according to the latest Colliers office report. That’s still well below 2019 levels. Even if leasing continues apace for the rest of 2024, volume will be about one-third of what it was pre-pandemic.

“We are still not at a place where tenant demand consistently, for a prolonged period, outpaces supply, at least for the overall Manhattan market,” Colliers’ Franklin Wallach told Cryan. “We do get glimmers of it, and we do get quarters and months where demand outpaces supply, but it is yet to be seen on a consistent basis where the entire market has turned the corner.”

Meanwhile, it may soon be easier to convert spaces that do not have a viable future as offices into housing. In addition to the changes and tax break recently approved by the state legislature, the Adams administration is pushing further reforms as part of the behemoth City of Yes for Housing Opportunity text amendment. A City Planning hearing on the proposal is slated for next week.

What we’re thinking about: What is at stake for the real estate industry going into the 2024 presidential election? Send a note to kathryn@therealdeal.com.

A thing we’ve learned: Jessica Katz, who previously served as the city’s chief housing officer, is now a policy adviser for Cannon Heyman & Weiss, an Albany-based law firm focused on housing.

Elsewhere in New York…

— A text message scam seeks to trick New Yorkers into paying $2.50 to avoid a $25 parking fee, Gothamist reports. If you’ve ever gotten a parking ticket in the city, you know that both these numbers seem like a bargain compared to actual charges.

— New York is likely three years behind when it comes to meeting renewable energy targets. In 2019, the legislature approved a mandate that 70 percent of the state’s electricity be generated by renewable energy by 2030. Gov. Kathy Hochul’s administration is considering bumping it to 2033, Politico New York reports.

— Former Mayor Rudy Giuliani was disbarred in New York after a court found that he “baselessly attacked and undermined the integrity of this country’s electoral process,” the Associated Press reports. An appeals court first suspended Giuliani’s law license in 2021 because he made false statements about the 2020 presidential election.

Closing Time 

Residential: The priciest residential sale Tuesday was $7 million for a 2,525-square-foot condo at 20 West 53rd Street in Midtown.

Commercial: The largest commercial sale of the day was $12.5 million for a 39-unit rental building at 359 West 48th Street in Hell’s Kitchen.New to the Market: The highest price for a residential property hitting the market was $11.7 million for a 7,000-square-foot townhouse at 51 West 73rd Street on the Upper West Side. Barrie Mandel of the Corcoran Group has the listing. — Matthew Elo