High-End New York City Office Space is Staging a Comeback at Astronomical Numbers
The HedgeFundSpaces.com team, Lance Leighton and Evan Margolin, were quoted in the cover article of this weeks’ Commercial Observer (June 18, 2013) about the resurgence of office space leases exceeding $100 per square foot. The Commercial Observer asks: “As an elite group of boutique financial firms reaches for prestige amid a shortage of high-end space, the number of deals soaring into the $100 per-square-foot stratosphere has hit pre-recession levels. But is $200 per-square-foot the final frontier?”
As the article states, there have been 28 triple digit office leases recorded thus far in 2013, compared to 35 in all of 2012. While the rest of the midtown office space market can be described as relatively stagnant, why the sudden increase in $100/sf+ deals? Simple — supply and demand. There is a VERY limited inventory of high-floor spaces overlooking Central Park, yet there has been a recent resurgence in demand for this type of product. Are $200/sf leases next? The answer is “absolutely”, but the question is “when”? With the top floor of 9 West 57th Street and the top floor of 767 Fifth Avenue, also known as The General Motors Building, leased at rents starting sub $200/sf (but escalating to over $200/sf during the lease term) it is hard to think of another piece of space that could warrant a rental rate exceeding those reportedly paid by Ruane Cunnif and Banco Itau at arguably the best two buildings in the Plaza District. Click here to read the full article “The $200 Club, Triple Digit Leasing Activity Shifts into High Gear.”
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