NY Observer > Office market

SL Green Inks 121,441sf Lease in 100 Park

Tom Acitelli — Mon, 11 Aug 2008 15:26:29 -0400

Leading city office landlord SL Green announced today it had leased 121,441 square feet of its 100 Park Avenue to financial firm BDO Siedman. The lease, which starts in January, is for 15 years and brings the 825,815-square-foot tower at 40th Street to 80 percent occupancy, according to a Business Wire release (which touted the lease as the 15th biggest in Manhattan so far this year).

Howard Ecker of Howard Ecker & Company represented BDO Seidman in the deal, while Cushman & Wakefield’s Paul Glickman, Tara Stacom, Mitti Liebersohn, Alexander Chudnoff, Diana Biasotti and Jonathan Tootell repped SL Green.

Manhattan Office Rents Will Drop, Brokerage Giant Says

Dana Rubinstein — Fri, 01 Aug 2008 10:58:30 -0400

For perhaps the first time, commercial brokerage giant Cushman & Wakefield predicted unequivocably that Manhattan office rents would drop, in its just released second quarter investment sales report.

Among the report's sobering conclusions:

■ Year-over-year sales activity through 2Q08 down 59 percent at $13.8 billion

■ Foreign investors have replaced previous high leverage buyers

■ Manhattan vacancy increased 1 percent to 7.1 percent in the last quarter, yet rising rents reached a record high of $71.59 a square foot, up 21 percent from a year ago

■ As financial sector layoffs materialize, rents will decrease

■ Development pipeline limited due to a lack of construction financing

For the full report, see attached.

Apocalypse Dow! New York Firm to Ax 96 Real Estate, Securities Lawyers

Dana Rubinstein — Wed, 30 Jul 2008 14:19:03 -0400

Guess attorneys aren't the cockroaches of the corporate world after all, able to survive cataclysms while their more fallible colleagues in finance and real estate fall.

Cadwalader, Wickersham & Taft will lay off 96 attorneys from its New York and London offices thanks to a shortage of real estate finance and securities work, according to a Bloomberg report:

``We're in the process of talking to lawyers here,'' Cadwalader Chairman Chris White said in an interview. He declined to comment on whether fired attorneys will receive severance pay through the end of the year, as the Wall Street Journal reported.

At least a dozen law firms have cut lawyers and staff since the U. read more »

Equilibrium Tremens

Tom Acitelli — Tue, 29 Jul 2008 10:59:31 -0400

Commercial brokers call it equilibrium: when the Manhattan office market's vacancy rate ascends to the 7 to 9 percent range, and the negotiation advantage tips toward tenants.

Manhattan may be there now.

A new report on the second quarter from Colliers ABR pegs the Manhattan vacancy rate at 8.7 percent by the end of June, and likely rising fast. That's an increase from 7.8 percent in the first quarter. For top-shelf Class A office space, the quarterly vacancy rate increase was even steeper: 5.7 percent to 7 percent.

The reasons? Rising layoffs among office-based employees amid a generally stagnant economy. From the report:

At long last the official employment numbers are catching up with the anecdotal evidence flying out of New York securities firms. read more »

Stats Show Layoffs Not Flooding Manhattan With Open Office Space

Dana Rubinstein — Wed, 09 Jul 2008 16:03:21 -0400

The souring real estate market hasn't caused brokerages to skimp on the food with which they lure reporters to quarterly breakfasts and luncheons.

At the Cushman & Wakefield breakfast at Michael's last week, the eggs were scrambled to the perfect fluffiness level; the crepes were nearly transparent; and the fruit salad didn't just include the cheap fruit -- there were blackberries and blueberries, too.

Meanwhile, at this afternoon's CB Richard Ellis second-quarter luncheon at the firm's MetLife building offices, the red meat, roasted asparagus and bowtie pasta were bountiful.

The good news was less so.

Howard Fiddle and David Maurer-Hollaender, both vice chairmen at CBRE, said that Manhattan leasing activity is down, but not by much. read more »

Conde Nast's Office Pink Slip

Tom Acitelli — Wed, 09 Jul 2008 10:55:27 -0400

The New York Post's Keith J. Kelly speculates aloud on what it means for a Conde Nast magazine to be moved from the headquarters at 4 Times Square to 485 Lexington Avenue, where the publishing empire has auxilary office space:

Last year, House & Garden was shut down just a year after moving its offices into that building. This week it was Golf for Women.

"If any magazine gets moved into here, it probably means they are getting ready to shut down," said one source.

One more title and it's an official trend!

Tumble! Manhattan Investment Sales Plunge In '08

Tom Acitelli — Tue, 01 Jul 2008 12:04:19 -0400

Over $13.8 billion in Manhattan investment sales closed or went under contract in the first six months of 2008, a precipitous drop from the $34 billion in sales volume done in the first six months last year. Nearly half of this 2008 volume came via foreign investors.

The numbers come from brokerage Cushman & Wakefield's latest quarterly Manhattan market report, released this morning during a breakfast at Midtown power eatery Michael's.

The dismal investment sales numbers--which cover building, property and portfolio sales--aren't a surprise, really. Nor is the increase in the amount of foreign investment (it accounted for maybe 12 to 15 percent of investment sales in previous six-month periods). read more »

It's Happening! Manhattan Office Vacancy Grows

Tom Acitelli — Mon, 30 Jun 2008 16:48:17 -0400

Office market vacancy rates are up significantly over last spring in Manhattan, according to a new report from brokerage Colliers ABR. The increases seem, at first, incremental; but they're actually quite significant for a market that last year had gotten used to month after month and quarter after quarter of steady vacancy rate drops as tenants leased more space at ever higher rents.

The vacancy rate for Midtown, for instance, the borough's top office submarket, increased from 6.4 percent in June 2007 to 8.2 percent this June. The vacancy rate for top-shelf, Class A towers in Midtown increased to 7.4 percent in June from 5. read more »

Parade Re-Ups for 89,000 Feet at SL Green's 711 Third

Tom Acitelli — Mon, 30 Jun 2008 08:44:00 -0400

The publisher of relentlessly cheery Sunday magazine Parade signed a 10-year lease renewal for 89,413 square feet of space at SL Green's 711 Third Avenue. The publisher occupies the entire sixth floor and parts of the seventh and 15th floors in the 20-story building at 44th street. The asking rent, according to brokerage CB Richard Ellis, which represented Parade on the deal, was $65 a square foot, about average for the area.

Gregory Tosko, Mary Ann Tighe and Ramneek Rikhy of CBRE represented Parade. SL Green handled the renewal in-house.

Release below:

CB RICHARD ELLIS ARRANGES 89,413-SQUARE-FOOT

PARADE PUBLICATIONS LEASE RENEWAL

New York, NY – June 30, 2008 – CB Richard Ellis announced today that it arranged a 10-year, 89,413-square-foot lease renewal at 711 Third Avenue on behalf of Parade Publications, Inc. read more »

If You Want To Know How Valuable New York Real Estate Is...

Tom Acitelli — Thu, 26 Jun 2008 11:17:58 -0400

... Look at real estate in other American cities. And what better cities for comparison than the nation's second and third largest?

Tribune Company potentate Sam Zell is considering selling the Chicago Tribune Tower and the Times Mirror Square complex, home of the Los Angeles Times. He could get as much as $150 million for the Tribune Tower and $235 million for the Times Mirror compex, The Wall Street Journal reports.

A little perspective: Were the 950,000-square-foot Tribune Tower in Manhattan, it would likely fetch as much as $1,000 a square foot, even in this current, rather bearish market. That means Mr. Zell could get nearly $1 billion from its sale. In Chicago, he's lucky if he gets 15 percent of that.

Just sayin'.