Last fall, JPMorgan Chase\u2019s 2.5 million-square-foot trophy, Foster + Partners-designed tower opened at 270 Park Ave. Six months on, the city\u2019s first all-electric tower, aka Jamie Dimon\u2019s Man Cave, is still inspiring fresh and innovative deals.<\/p>\n
That\u2019s because C-suiters now realize that having a technologically modern and healthy workspace is good for recruitment, retention, bragging rights and the bottom line.\u00a0<\/p>\n
The largest new tower now in the works is\u00a0175 Park Ave. next to Grand Central Terminal.\u00a0It will rise 95 stories (1,519 feet) and house 3.02 million square feet, including a Hyatt hotel on floors 83 to 90. (The top five floors are mechanical).<\/p>\n
175 Park, the tallest skyscraper coming to NYC, has yet to land an anchor tenant. RXR\/TF Cornerstone<\/p>\n
It\u2019s still seeking an office anchor for its base, but it\u2019s developers, RXR and TF Cornerstone, are banking on a design by Skidmore Owings Merrill \u2014 which also did 1 WTC and 7 WTC \u2014 to attract top tenants.<\/p>\n
But constructing the next hit office tower will take time, with the first graduating class of new skyscrapers not opening for build-outs until late-2028.<\/p>\n
That\u2019s why there was a significantly higher number of renewals in the first quarter of this year, according to Jonathan Mazur, who heads research for Newmark. Overall, 46.2% of the leases were renewals, extensions and expansions. But zoom in on the tenants leasing 100,000 square feet and up, and that number balloons to 80%. Of the 5.8 million square feet leased this year, almost 4.7 million square feet of that was in Class A trophy space.\u00a0<\/p>\n
\u201cReinvented properties comprised almost 82%,\u201d added Bruce Mosler of brokerage Cushman & Wakefield. \u201cThe large leases over 100,000 square feet are still driving demand.\u201d<\/p>\n
Bank of America is taking over 1 Bryant Park. J.C. Rice<\/p>\n
Among the big renewals was the blockbuster Bank of America takeover of\u00a01 Bryant Park.<\/p>\n
It\u2019s hard to believe the glamorous, angular white glass tower developed by the Durst Organization is a 20-year-old structure. Negotiated for the financial institution by Bob Alexander at CBRE, the new transaction puts BofA into another 20-year deal, but this time it will be responsible for the entire 2.4 million-square-foot tower and retail space.<\/p>\n
Another company on the move is American Express. After a stressful two years of negotiating a complex transaction, the company has taken over Larry Silverstein\u2019s lease with the Port Authority for the land that the new\u00a02 World Trade Center\u00a0will stand on. The last missing piece of the WTC\u2019s 16 acres, it will finally be completed in 2031 by the soon to be 95-year-old Silverstein.<\/p>\n
American Express has inked a complex deal that will finally get 2 World Trade Center out of the ground. Foster Partners<\/p>\n
The land lease with Port Authority for the 55-story, nearly 2 million square-foot edifice includes options for both a purchase and a renewal option to extend the deal to for a full 99 years \u2014 a major long-term commitment to the city by a global financial company.<\/p>\n
Silverstein has enough proposals to fill 800,000 square feet at\u00a07 WTC\u00a0at asking rents of $120 to $140 per foot \u2014 ironically because tenant Moody\u2019s will move to the lower portion of Brookfield\u2019s 200 Vesey St., right under American Express\u2019s current office. \u00a0<\/p>\n
All the dealmaking has taken a big bite out of the Manhattan trophy vacancy rate, dropping it to 3.4%, according to Newmark statistics. It\u2019s tough for any firm desiring new updated quarters to find affordable space, as asking rents soar from $150 per foot to a whopping $400 per foot \u2014 what the best spaces in Related\u2019s upcoming 52-story\u00a0625 Madison\u00a0are asking. \u00a0\u00a0<\/p>\n
Asking rents at 7 WTC\u00a0range from $120 to $140 per foot. Christopher Sadowski<\/p>\n
\u201cThe most significant bullet point is that rents are being driven up across the board,\u201d Mosler observed. \u00a0\u201cWork letters are holding and free rent is stabilizing but rents are moving up.\u201d<\/p>\n
Jay Neveloff, partner at the law firm HSF Kramer, agreed: \u201cOffice rents are at an all-time high. There are rents I never thought were imaginable \u2014 but it is for amazing space.\u201d\u00a0<\/p>\n
Recent deals at both\u00a09 W. 57 St.\u00a0and\u00a0One Vanderbilt\u00a0have been signed at over $300 a foot.\u00a0\u201cThat [higher rent] is having a ripple effect, but it is still building by building,\u201d Neveloff explained. \u201cOlder, unrenovated buildings that have low ceilings won\u2019t command those rents.\u201d<\/p>\n
The demand for space is coming from tech tenants, artificial intelligence tweakers and financial firms, while law firm requirements are at their highest level in more than 10 years, Mazur said. \u00a0<\/p>\n
After merging with Schulte Roth at 919 Third Ave. to become McDermott Will & Schulte, the law firm is now space crunched at the very full One Vanderbilt.<\/p>\n
The new all-electric 343 Madison Ave. is already scoring top tenants. Volley Studio<\/p>\n
That combined law firm is in talks with BXP for six floors at the in-process, 46-story\u00a0343 Madison Ave., which has already signed C.V. Starr for 275,000 square feet in the base of the 930,000-square-footer. <\/p>\n
Floors in the electric, hospitality-oriented building, designed by Kohn Pedersen Fox (KPF), will begin to be turned over to tenants in 2029.<\/p>\n
Another law firm, Simpson Thacher, is still negotiating its lease as the anchor for Gary Barnett\u2019s upcoming 1.6 million-square-foot tower at\u00a0570 Fifth Ave.\u00a0with Ikea as another investor and retail tenant, that will have room for another 350,000 square feet of companies on the top. <\/p>\n
Law firm Simpson Thacher is looking for a deal at 570 Fifth Ave. INGKA<\/p>\n
Asking rents for this KPF-designed tower are roughly $225 to $290 per foot.\u00a0\u00a0<\/p>\n
In Hudson Yards, Related and Oxford Properties\u2019 1.4 million-square-foot\u00a070 Hudson Yards\u00a0is already coming up from the ground for future tenant Deloitte in its move from Rockefeller Center. The fully electric, net-zero carbon building is designed by\u00a0Roger Ferris + Partners and Gensler with ground-floor amenities by INC.<\/p>\n
It\u00a0will have unobstructed views of the Hudson River and tons of outdoor space with tenants to start build-outs at the end of 2028.<\/p>\n
Deloitte is committed to 70 Hudson Yards. Courtesy of Related Companies<\/p>\n
The top 500,000 square feet is being pitched as a building-in-building opportunity with its own private terraces, lobby on West 35th Street, a floor of amenities and even river-to-river views.<\/p>\n
The rent ranges from $250 to more than $300 per foot.<\/p>\n
There\u2019s also the top of the 1.8 million-square-foot Citadel tower. Developed by Citadel, Vornado and Rudin and designed by Foster + Partners it will rise to 1,600 feet at\u00a0350 Park Ave. Asking rents are $285 a foot and the target opening date is 2032.<\/p>\n
The rest of the towers on the drawing board may not be ready until years later, but tenants with expirations in the 2030s are already exploring their options.<\/p>\n
Just look at Societe Generale: its lease at 245 Park Ave. expires in 2032, but it\u2019s already kicking the tires for a 500,000-square-foot slot at Vornado\u2019s\u00a0Penn 15; RXR\u2019s\u00a0175 Park;\u00a0or BXP and Moinian\u2019s\u00a03 Hudson Blvd.<\/p>\n","protected":false},"excerpt":{"rendered":"Last fall, JPMorgan Chase\u2019s 2.5 million-square-foot trophy, Foster + Partners-designed tower opened at 270 Park Ave. Six months…\n","protected":false},"author":2,"featured_media":600477,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[228,226,227,2444,229,88,54928,20951,61944,35045,1170,14956,50089],"class_list":{"0":"post-600476","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-arts-and-design","8":"tag-arts","9":"tag-arts-and-design","10":"tag-artsanddesign","11":"tag-commercial-real-estate","12":"tag-design","13":"tag-entertainment","14":"tag-fifth-avenue","15":"tag-hudson-yards","16":"tag-office-space","17":"tag-park-avenue","18":"tag-real-estate","19":"tag-skyscrapers","20":"tag-world-trade-center"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/600476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=600476"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/600476\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/600477"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=600476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=600476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=600476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}