The New York City office market started the year in full force, with a fruitful first quarter that saw various high-profile leases signed.
The second quarter of 2019 kept that momentum going, and office leasing activity remained strong, according to Metro Manhattan.
According to a Savills report, office leasing volume in New York City totaled 9.9 million square feet in Q2, most of it concentrated, in Manhattan.
The success of Hudson Yards is fueling demand for quality office space in Midtown, and companies are willing to pay a premium to attract top talent.
The average asking rent for NYC office space reached $78.31 per square foot in Q2, according to the report. Rents for Class A office space are significantly pricier, closing the quarter at $90.86 per square foot.
The availability rate dropped down to 10.6%, yet the demand remains high, leading to higher prices and intense competition for available space.
Here are the top deals of the quarter:
McCann Renews 450,000 s/f at 622 3rd Avenue
The largest office lease of the quarter closed in June, when McCann Worldgroup extended its current lease at 622 Third Avenue for another 15 years. The company’s 450,000 s/f lease was set to expire in 2021. The advertising agency has been operating out of the 39-story Grand Central Plaza since 2000, where it occupies floors 2 through 5 and 16 through 28. The asking rent was $70 psf. JLL represented the tenant while the landlord, Cohen Brothers Realty, was represented in-house by Senior VP Marc Horowitz.EmblemHealth Maintains 440,000 s/f at 55 Water Street
Insurance provider EmblemHealth signed a 15-year renewal.
The company occupies 440,000 square feet in a the largest office building in the city based on floor area. The 4 million-square-foot tower at 55 Water Street is owned by New Water Street Corp., part of the Retirement System of Alabama, and has been the home of EmblemHealth since 2003. Colliers International represented the tenant, while a CBRE team represented the landlord.
NYC Human Resources Administration Seals 342,000 s/f in Brooklyn
The HR Administration extended its current lease at Clipper Equities’ 250 Livingston Street for another 10 years. The new agreement will start in August 2020, when the current 342,496 s/f lease expires. The 12-story building is also home to the Department of Environmental Protection, and the two government agencies take up most of the office portion.
Justworks Commits to 275,000 s/f at 55 Water Street
Tech company Justworks is exiting the Starrett-Lehigh Building in Chelsea to take up 275,000 s/f of FiDi office space.
Colgate-Palmolive Consolidates 242,000 s/f HQ at 300 Park Avenue
Long-time anchor tenant Colgate-Palmolive renewed its digs at 300 Park Avenue. The company will continue to operate its 241,657 s/f global headquarters at the Flatiron District building, extending its current lease, which is set to expire in 2023. Even though the company has downsized from 312,000 s/f, its commitment was enough to make landlord Tishman Speyer scrap demolition plans for the 26-story building. Tishman had been considering building a new office tower at the site, to take advantage of the Midtown East rezoning that allows developers to build taller projects.
BMO Capital Markets Takes Over 215,000 at 4 Times Square
The investment bank signed a 215,000 s/f lease at 151 West 42nd Street, also known as 4 Times Square. The bank is moving across the street from its location at 3 Times Square. It will take over the vacant space left by Conde Nast, which moved to One World Trade Center, as well as a portion of the space occupied by Skadden, which will move to One Manhattan West in Hudson Yards. BMO will consequently become the largest tenant at the tower owned by the Durst Organization.
WeWork Leases Another 212,000 s/f at 620 6th Avenue
WeWork might use the space to house its own employees instead of setting it up as a shared office hub. The building is around the corner from the We Company headquarters at 115 West 18th Street. WeWork will take over the space previously occupied by Spotify, which moved to 4 World Trade Center, and Mediaocean, which is moving to 120 Broadway.
First Republic Bank Scores 212,000 s/f at 460 West 34th Street
First Republic Bank is the latest tenant to join the Hudson Yards office roster, after signing a 25-year lease with SL Green at 460 West 34th Street. The bank will occupy part of the ground and mezzanine floors, to feature both corporate offices and retail bank space. SL Green purchased a majority interest in the building in May 2019, and will embark on a large-scale redevelopment of the 20-story tower.
AllianceBernstein Signs 189,000 s/f Lease at 66 Hudson Boulevard
AllianceBernstein became one of the biggest names to make the move to Hudson Yards this past quarter. The company will join Pfizer at The Spiral, a 65-story office tower currently under development at 66 Hudson Boulevard. AllianceBernstein will move into its new offices in January 2025, taking over floors 25 through 28 in a 20-year lease. The Spiral is being developed by Tishman Speyer on a full block stretching from West 34th to West 35th Streets and from Tenth Avenue to the Bella Abzug Park. Pfizer will take over 800,000s/f of office space for its global headquarters in 2022.
CBS Renews 164,000 s/f Presence at 28 East 28th Street
In April, CBS announced it was staying put at the 15-story building for another 15 years. The company occupies 164,000 s/f on floors 8 through 10, as well as a small sub-concourse area. A Cushman & Wakefield team represented CBS in the negotiations, while building owners George Comfort & Sons, Jamestown Properties and Loeb Partners Real Estate were represented in-house.