Avenue Report: Midtown Reigns Supreme in Demand for Office Space
– Analysis of Manhattan’s largest office leases reveals Midtown is the location of choice for three of every four deals completed in 2016; New leases in Midtown climb 10% over 2015
– Sixth Avenue is the Top Avenue for leasing in 2016
NEW YORK, March 7, 2017 – The results are in and Midtown has expanded its lead as the most in-demand office market in Manhattan, according to the Avenue of the Americas Association’s inaugural Avenue Report, based on an analysis of CoStar office leasing data conducted by the association and member company Rockefeller Group.
Last year 37 of 50 leases on CoStar’s Top Manhattan Office Leases list were located in Midtown – approximately three of every four deals – up 6 percent from 2015 when the submarket accounted for 35 of the top 50 leases. Downtown and Midtown South each accounted for six of Manhattan’s largest leases in 2016, down from eight and six in 2015, respectively. One lease in each year was completed in Harlem, rounding out the top 50.
Among the new leases, or relocations, 22 of 29 were located in Midtown in 2016, compared to 20 in 2015 – an increase of 10 percent. Midtown South accounted for four new leases last year, unchanged from the prior year. Downtown accounted for three new leases, a decline from five in 2015.
In 2016, new leases outpaced renewals or expansions, comprising 29 of the 50 largest leases for the second consecutive year. The largest new lease of the year was approximately 418,000 square feet for Major League Baseball at 1271 Avenue of the Americas. The largest lease of 2016 overall, a renewal, was 900,027-square-feet for McGraw-Hill Financial at 55 Water St. in Lower Manhattan.
“Over the past few years new construction has raised the bar for office owners in Manhattan by establishing pockets of demand in new locations,” said Dan Rashin, Rockefeller Group co-president and CEO. “The response has been reinvestment of substantial capital by some of the leading office owners and investors in the world, which has reinvigorated existing properties and essentially leveled the playing field with new construction, reaffirming the influence of location as a key factor in leasing success.”
Among Manhattan’s 50 largest deals, SL Green led the industry in overall square footage leased, which includes new leases, renewals or expansions. Of transactions large enough to make the list, which had a cutoff of 93,516 square feet in 2016, properties owned by SL Green accounted for approximately 1.8 million square feet of leasing. For new leasing activity, excluding renewals or expansions, Rockefeller Group ranked number one with approximately 561,274 square feet leased.
Sixth Avenue, also known as Avenue of the Americas, was recognized as the Top Avenue for leasing in 2016, accounting for 2.3 million square feet of transactions among the 50 largest. Tenth Avenue was ranked second, with approximately 1.4 million square feet, followed by Park Avenue with 1.3 million square feet leased.
* * *
About Rockefeller Group
Rockefeller Group is a leading real estate developer, owner and investor, known since the development of Rockefeller Center for pioneering large-scale urban mixed-use development. For nearly nine decades the company has been trusted for its financial strength, stability and vision, and today remains committed to the selective acquisition, management and development of innovative, high-quality office, industrial, residential and mixed-use properties in urban centers and strategic distribution markets. The company combines the global perspective and market access of a sophisticated development and investment management platform, through its partnership with Tokyo-based Mitsubishi Estate Co. Ltd., and its strategic investments in independent property fund platforms in the United States and Europe. Visit RockefellerGroup.com.
About Avenue of the Americas Association
The Avenue of the Americas Association is a civic improvement corporation that promotes the commercial welfare of “America’s Corporate Corridor” and New York City. The Avenue of Americas, a thoroughfare of approximately four miles long, is one of the City’s most exciting locations, boasting impressive architecture, corporate headquarters, restaurants, entertainment, cultural attractions, parks, plazas and business districts. The Association acts as an intermediary with government agencies and officials, and provides its membership with information on proposed laws and actions that will affect them. Issues such as transportation, physical improvements, signage, public safety, economic growth and homelessness are some of the challenges addressed by the Association in recent years. For more information or to reach the association, please visit www.aveoftheamericas.com.
# # #