Avenue Report: Sixth Avenue Repeats as Top Location for Manhattan’s Largest Leases
– West Side leasing activity reaches nearly 60 percent of the total in 2017; Lower Manhattan activity climbs year-over-year
– New construction, redevelopment and renovations factoring into leasing decisions
NEW YORK — March 13, 2018 — Midtown Manhattan remained the most active submarket for the city’s largest office leases in 2017, according to the second annual Avenue Report, produced by the Avenue of the Americas Association and member company Rockefeller Group, based on an analysis of office leasing data compiled by CoStar Inc.
In particular, the West Side of Manhattan, led by Sixth Avenue, saw the majority of office leasing last year, or 29 of the 50 largest leases. Sixth Avenue ranked first among all locations in Manhattan for the second consecutive year, accounting for 10 of the 50 largest leases and a total of 3.27 million square feet, up nearly 42 percent from 2.31 million square feet in 2016.
Other strong locations on the West Side included Tenth Avenue, home to several new office developments in the Hudson Yards area, as well as Seventh Avenue and Ninth Avenue. Tenth Avenue was the second most popular location in 2017 with four leases totaling 1.66 million square feet. Seventh Avenue was third with six leases totaling 1.65 million square feet. Ninth Avenue saw 1.07 million square feet leased, placing sixth overall. Broadway, which finished fifth, had two leases on the West Side, and three in Lower Manhattan, for a total of 1.14 million square feet.In total 34 of the 50 largest leases on CoStar’s Top Manhattan Office Leases list were located in Midtown, down from 37 leases in the prior year, but up 21 percent to 10.2 million square feet leased. On a square footage basis, leases in Midtown accounted for approximately 72 percent of the leasing activity on Manhattan’s largest leases last year.
Lower Manhattan activity jumped to 11 leases in 2017, up from six in 2016. On a square footage basis, Downtown leasing volume reached approximately 3.0 million square feet, or 21 percent of the total, up from 1.7 million square feet in the prior year.
In 2017, new leases outpaced renewals or expansions, comprising 30 of the 50 largest leases, up from 29 in the prior year. The largest new lease of the year, BlackRock’s 846,990-square-foot lease at 50 Hudson Yards, was also the largest new lease overall. The largest renewal, which had an expansion component, was 793,687 square feet for 21st Century Fox at 1211 Sixth Avenue.
“To attract and retain talent, the largest and most sophisticated office tenants continue to demonstrate a preference for new or like-new physical assets in highly accessible, amenity rich environments,” said Daniel Moore, Rockefeller Group president and CEO-elect. “New and renovated properties throughout Manhattan have benefited from this trend, with Midtown standing out as the location of choice, whether it be in centrally located renovated buildings along Sixth and Seventh Avenues or the new developments on the Far West Side.”
“The data supports the trends we are seeing take place on Sixth Avenue every day,” said Winston Fisher, president of the Avenue of the Americas Association and partner at Fisher Brothers. “Upgraded infrastructure, asset revamps, transportation connectivity to every borough as well as a host of neighborhood amenities are at the heart of this Midtown movement. We are pleased to witness this trend and will proudly continue to nurture it.”
Six Manhattan Avenues or Streets remained among the top 10 for consecutive years, including Sixth Avenue, Tenth Avenue, Broadway, Fifth Avenue, Church Street and Madison Avenue.
Newcomers to the top 10 in 2017 included Seventh Avenue, Liberty Street, Ninth Avenue and Lexington Avenue. Park Avenue, Water Street, Second Avenue and Third Avenue fell out of the top 10 for 2017.
Among Manhattan’s 50 largest deals, Brookfield Office Properties led the industry in 2017 for overall deal volume and square footage leased, which includes new leases, renewals or expansions. Of transactions large enough to make the list, properties owned by Brookfield accounted for 11 leases and approximately 3.2 million square feet. Nine of the 11 leases were new leases, for a total of 2.61 million square feet.