Third Avenue Offices Inch Into The $100 PSF Club

As rents hit record highs on prime Midtown corridors, Third Avenue is beginning to notch milestones of its own.

Financial firm Karbone recently signed a 20,000-square-foot lease at Fisher Brothers’ 605 Third Avenue with an asking rent of $120 per square foot, according to a source with knowledge of the deal.

The lease, which spans the entire 32nd floor of the 44-story Class A tower, marks a record rent for the building and is a sign that Midtown’s longtime discount corridor is inching into triple-digit territory.

In 2025, Third Avenue scored its first two leases above $100 per square foot since Colliers began tracking the figures in 2011, said Franklin Wallach, executive managing director of research and business development. Now, a growing number of Class A buildings are asking more than $100 per square foot on the upper floors of renovated properties.

“It feels like there is a bit of a renaissance afoot for Third Avenue,” said JLL’s Cynthia Wasserberger. “You’re seeing this resurgence, where the buildings are being amenitized, they’re being repositioned and, in some cases, they’re having significant overhauls. I think it just took time for people to rediscover how great some of these buildings are that have been a little bit off the radar.”

Third Avenue has long trailed its glitzier neighbors in asking rents, and the gap remains wide.

The average asking rent on Third Avenue is just under $70, compared to more than $113 on Fifth Avenue and $114 on Park Avenue, according to Colliers data. Availability on Third Avenue has dropped from a post-pandemic peak of about 27 percent in 2022 to 19.5 percent today – still elevated, but moving in the right direction for landlords.

As Park, Madison and Fifth avenues fill up, tenants are increasingly willing to look at Third Avenue, Wasserberger said. A wave of building upgrades and amenity packages has repositioned older office stock to compete with newer construction. Properties like the Durst Organization’s 825 Third Avenue, SL Green’s Lipstick Building and 605 Third have all undergone significant renovations, allowing landlords to raise rents on higher floors.

Transit has also played a role. The Long Island Rail Road’s east side access into Grand Central has boosted the corridor’s appeal. And residential conversions have removed roughly 1 million square feet of office space on Third Avenue over the past three years, tightening availability and creating a “musical chairs” effect as displaced tenants relocate to other buildings nearby.

Fisher Brothers invested $25 million to renovate 605 Third Avenue in 2016, following Neuberger Berman’s departure from more than 270,000 square feet. The overhaul helped reposition the 1.1 million-square-foot tower and set off a wave of new leasing activity. Now the building is an early example of the higher prices emerging along the corridor.

“Third Avenue is not playing in the $150 or $200 (per square foot) category,” Wallach said. “But the overall average still has runway, as long as the demand supports it, to continue to increase as the rest of the market does.”