Manhattan’s stalled office leasing market is poised for a late-year boom

Steve Cuozzo

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by Steve Cuozzo

The dam is finally about to break on Manhattan’s stalled office leasing market — and landlords and brokers are ready to pop champagne corks after the slowest year on record.

Sources told the newspaper that at least a dozen large deals, each with an area of ​​up to 250,000 square feet, are about to be completed, likely by the end of the year.

Some new leases have already “expired” – meaning they have been drawn up and waiting for one side or another to sign. Others are in advanced talks and “trading paper.”

Despite the known problems of commercial real estate, the deals may herald larger transactions — each up to 1 million square feet — in 2024, the sources said.

The current overall availability rate in Manhattan is around 20%.

All but one include old towers that have been expensively upgraded, reflecting the so-called “escape to quality.”

“Of course they will be in old, redeveloped buildings, because the new buildings, like 1 Vanderbilt and Manhattan West, have no space left,” one source said.

It’s common for a flurry of big deals to close before January 1 of any given year, partly for tax purposes — and also, as one veteran player put it, “so owners, brokers, accountants and lawyers can get out of Dodge in 2018.” “. “It’s time for their winter vacations.”

The most exciting situation is the repositioned and amenity-rich 22 Vanderbilt, where owner Milstein recently brought in Brookfield to help with leasing and marketing.

The tower recently hired public relations firm Joel Frank to lease 1.19 million square feet at a 68% interest.

Now, sources said, advanced talks are underway with Bain & Co. For a whopping 250,000 square feet of space, and for TD Bank to take 100,000 square feet — expanding from TD’s 200,000 square feet at SL Green’s 1 Vanderbilt next door.

“Nothing to report here – no leases entered into,” a rep for the building said.

Another pending deal for a quarter-million square feet is for American Eagle at George Comfort & Sons 63 Madison Ave. The retailer’s offices are currently located at Chetrit Group’s 401 Fifth Ave. Another potential lease at 63 Madison is for Baruch College for 100,000 square feet. .

A representative for Comfort declined to comment. Savills’ Mitty Lieberson, American Eagle’s broker, did not return an email seeking comment.

A 100,000-square-foot lease to commercial banking firm BDT & MSD Partners at the redeveloped 550 Madison Avenue in Olayan America “is practically a sure thing,” an insider said. This will be an expansion into New York where the company currently only has about 33,000 square feet at 1 Vanderbilt.

The company was created earlier this year from the merger of Byron Trott’s BDT & Company and MSD Partners, which manages the fortune of Michael Dell and his family.

Olayan’s representative had no comment. The tower — which one broker recently told us was “burning in the middle of a terrible market” — was roughly 70% leased even before the IDB deal.

Farther west, law firm Ropes & Gray is in “advanced discussions” to acquire 240,000 square feet of sublease space for Warner Bros. Television. Discovery at 30 Hudson Yards of Related Companies. If a deal is reached, the company would leave 1211 Sixth Ave., where it has about 300,000 square feet.

The Sixth Avenue tower is home to News Corp, the parent company of the New York Post, and Fox Corp, which, as we reported in January, signed separate lease extensions through 2042. The media companies own roughly 1.2 million square feet in the two 2-million-square-foot spaces Square Foot Tower is owned by Ivanhoe Cambridge Superannuation Fund.

Josh Kuriloff and Mitchell Arkin of Cushman & Wakefield, leasing agents for 1211 Sixth, did not return a call for comment.

However, there are several other companies vying for the Hudson Yards space, one of which is Susquehanna International Group, now located at 140 Broadway.

And there may be bigger deals in the works soon. Blackstone, American Express and Jane Street Capital, among others, are exploring about 1 million square feet each, The Post’s Lois Weiss reported.