The Wall Street Journal reports that office space in Midtown South (defined, bizarrely, as Canal Street to 30th Street) is seeing extremely high demand. The neighborhood has become so hot that bidding wars are evidently opening between rival tenants, which is pushing rental prices to their highest levels since 1995. In the third quarter, the average rent was $83.14 per square foot. Meanwhile, top-tier office buildings recorded an average rent of $94.61 per square foot—13.5 percent higher than top-tier offices in neighboring Midtown ($83.38 per square foot).
However, one needs to be critical with the data. Some areas of Midtown South are probably extremely hot. Others, most likely, are not. The problem is that the data set includes: The Meatpacking District, the Flatiron District, Soho, the East Village, the West Village, Nolita, Little Italy, the Lower East Side, Alphabet City, part of Chinatown, Chelsea, and NOMAD, among others. It is simply too large an area with too many niche markets to make such a generalized statement.
Owners should conduct a more detailed analysis before they get their hopes up about there being a bidding war for one of their vacancies.
The Wall Street Journal has more.
Corporate real estate developers are increasingly catering to the tastes of a new class of workers. As millennials ascend the corporate ladder and become the largest demographic within the workforce, their preferences are beginning to have a greater amount of power when it comes to determining where a company’s office should be located and how it should look. However, it is more than just aesthetics. These preferences are also shaping the way developers use spaces within their buildings.
“It’s more than just redoing your lobby. It has to be a complete makeover of the asset,” Bruce Mosler of Cushman & Wakefield told the Financial Times.
While such improvements may require a significant capital investment, they do pay dividends. Craig Deitelzweig of Marx Realty says his company’s improvements to its property on East 44th Street, now rebranded as “10 Grand Central,” have pushed rents up by 30 percent. “If landlords don’t’ think creatively and in a future-forward way,” he said, “they won’t exist in 10 years.”
The Financial Times has more.
In a Landlords New York Minute – A (Very) Brief Look Around the World
China’s trade surplus with the United States hit a new record last month despite the implementation of myriad tariffs during the last few months, Prime Minister Shinzo Abe of Japan hopes to pass legislation to make its immigration policies less strict to attract more blue-collar workers, and a Turkish court ordered the release of American pastor Andrew Brunson after sentencing him to time served for a crime (aiding terrorism) it is doubtful he committed. President Donald Trump had lunch with Kanye West in the Oval Office yesterday, lashed out at the Federal Reserve for raising interest rates during an economic expansion (which is what it’s supposed to do), and signed the Music Modernization Act into law. Meanwhile, Turkey claims that it has proof that several Saudi nationals executed journalist Jamal Khashoggi in Saudi Arabia’s consulate in Istanbul, Hurricane Michael continued to wreak havoc upon parts of Appalachia and the Florida Panhandle continued to reel from the damage the storm brought Wednesday, and new evidence has revealed that Commerce Secretary Wilbur Ross hoped to include a question about citizenship on the census for exclusively partisan reasons. In economic news, corporate loans are outperforming most other asset classes, the world is pumping out more oil than ever before, and some mall landlords are pleased that Sears will cease to be an anchor tenant once it goes bankrupt because it will allow the vacant big-box spaces to be renovated for more innovative uses. Two potential developments near the Brooklyn Botanic Garden are being delayed due to the effects the projects’ shadows could have on the famed greenspace, the Empire State Dairy complex in East New York will likely become a 14-story residential building owned by HP Brooklyn Dairy HDFC, Amtrak is holding up the creation of four new commuter rail stations in the eastern portion of the Bronx that would be built on the underutilized Hell Gate line to get more money out of the Metropolitan Transportation Authority, and the Brooklyn Public Library wants the public to name the eagle statue that has stood in the lobby of its main branch since 1997 after having originally been the mascot of the original Brooklyn Daily Eagle at Johnson and Washington streets.
Bees stopped buzzing when the 2017 Great American Eclipse entered totality, you can buy a piece of actual moon, astronauts on the International Space Station may be stranded in orbit until spring, Amy Winehouse’s hologram will soon go on tour, the New York Times published a really interesting map of every building in the U.S., cats are not very good at catching city rats, millennials are killing American cheese, and a Philadelphia man caught a catfish while fishing in a Broad Street storm drain. Finally, Maryse Condé of Guadeloupe won the New Academy Prize in Literature.