Tuesday, April 6, 2021

Manhattan Office Rental Market Report, Q1 2021

Manhattan Office Rental Market Report, Q1 2021. A year has past since the pandemic began and its dramatic impact on the office market is apparent. The closure of essential businesses contributed to a migration of residents away from the city. Office occupancy in New York is now hovering around 20%, among the lowest in the nation. Many companies learned to operate virtually and their work-from-home strategy proved to be productive and cost-effective.

Commercial real estate owners and private employers are optimistic that the deployment of Covid 19 vaccines will encourage more workers to return to the office voluntarily. In anticipation of this trend transportation providers, buildings and office occupiers themselves have implemented sanitary protocols to minimize exposure to the virus. In an effort to reduce workplace headcounts many companies are using a hybrid work model that divides an employees’ work week between the office and home. It is likely that that the long-term impact of this model will result in an overall reduced demand for space.

Remote Work Is Here to Stay. Manhattan May Never Be the Same.

Growing Number of Companies Plan to Shrink Office Space, Survey Finds

Construction at the 2.85M SF Spiral at 66 Hudson Boulevard in Hudson Yards, Manhattan

There are more than 21 million-SF of office development projects under construction at this time. Additionally, well capitalized owners of existing buildings are undertaking expensive repositioning (renovations) of certain assets to attract new Tenants. Although vacancy levels will be elevated in the coming years, developers are optimistic that future leasing activity will occur in the newest and highest quality buildings.

The Rudin Family to Reposition 3 Times Square

In the current Tenant-friendly environment asking rents are being discounted and incentives like rent abatements are increasing. Many Landlords are offering more flexible terms with shorter duration leases.

Office landlords offer discounts to lock in leases

Costar’s Analysis of the Manhattan Office Rental Market

CoStar is the world leader in commercial real estate information and has the most comprehensive database of real estate data throughout the US, Canada, UK, France, Germany and Spain.

Key Costar Manhattan Office Indicators:

Vacancy Rate: 11.3% ↑
Market Rent: $57.52* ↓ (The rental income that a property would most probably command in the open market. This is the weighted average across all Manhattan office buildings.)
Under Construction: 21,889,096 SF
Total Rentable Building Area: 949,560,537 SF

Projections

The CRE Brokerage community is projecting Effective Rents* may be reduced 15%-20% from the peak recorded in 2019. This is consistent with the rent adjustments that occurred after 9/11. Substantial rent discounts may occur in lower quality Class B and C buildings. Trophy and Class A buildings that currently have a minimal amount of vacancy and a stable Tenant roster are unlikely to offer significant discounts on their rent.

*Effective Rents: The average rent paid over the term by a tenant adjusted downward for concessions paid for by the landlord (such as free rent, moving expenses, or other allowances), and upward for costs that are the responsibility of the tenant (such as operating expense pass through).

Office occupiers that are flexible in regards to their lease term and space design will secure the deepest rental discount with a Sublease. Refer to our recent report Sublease Risk & Rewards in 2020.

Vacant sublet space in New York’s office market is up 91% since mid-2019

About Cogent Realty Advisors, Inc.

Cogent Realty Advisors is an independent and licensed no fee Realtor with 20 years of experience representing businesses that lease NYC office space. We offer solutions for office Tenants seeking stability and value in uncertain times. For information phone Mitchell Waldman at (212) 509-4049.

#ManhattanOfficeQ12021

The post Manhattan Office Rental Market Report, Q1 2021 appeared first on Rent NY Office.

Thursday, February 25, 2021

One World Trade Center Rental Guide 2021

Renting an office at One World Trade Center is a defining moment for a global business.

• A universally recognized symbol of prosperity, freedom and resilience

• An ultra-modern urban design with rich corporate amenities and best-in-class technology, efficiency and safety

• Excellent value for your rental dollars

• Direct in-building access to the new Fulton Street Station transportation complex and luxury shops at the Westfield World Trade Center. The architectural focal point of this underground city is the Oculus.

• High quality neighborhood restaurants, hotels and services. Link follows: Downtown Alliance.

• Professional on-site ownership and management

Who is Leasing Offices at One World Trade Center?

One World Trade Center describes itself as “Home to New York City’s largest TAMI (technology, advertising, media information) tenant community. Notwithstanding, all business categories are represented and the largest Tenant is Conde Nast publishing.

One World Trade Center Offices for You

One World Trade Center is a center core office building which means that the elevators, stairs and mechanical systems are in the middle of each floor. As a result all spaces are column free and have spectacular light and views.

At One World Trade Center most work spaces are designed as wide-open collaborative work environments. However, tradition layouts with perimeter glass fronted offices and conference rooms are both efficient and impressive.

Three Different Leasing Programs are Offered:

#1: Pre-built move-in ready office space with elegant finishes.

#2: Unfinished/white box space that the Landlord will build to your design specifications.

#3: Unfinished/white box space that you can build on your own utilizing money (the “cash contribution”) and time (the “rent abatement”) provided by the Landlord.

2021 Offices for Lease

Shown below are sample offices. Furniture is not included and is displayed for space planning purposes only. Offices measuring less than 5,000 rentable square feet are in high demand and rent very quickly.

2,488 RSF

3,510 RSF

4,963 RSF

8,995 RSF

9,499 RSF

34,382 RSF

Pricing for Direct Leases at One World Trade Center

As a result of the impact of the Covid-19 pandemic on the office market more flexible lease terms are being offered. Asking rents are from $75.00 to $85.00 per rentable square foot (PSF) depending on the floor and view.

For example, the 3,510 RSF office shown above has an asking rent of $80.00 per rentable square foot. $80.00 X 3,510 RSF = $280,800 per year or $23,400 per month. Cogent Realty has a solid track record negotiating lower rents and other leasing incentives like free rent for its clients. Additional office overhead costs include electricity, annual rent and real estate tax increases. Municipal Incentives may be available to reduce your occupancy cost.

Subleases at One World Trade Center

A Sublease can offer a discounted rent for pre-built office space, and frequently furniture, fixtures and office equipment is included. Here is a link to our blog Sublease Rewards and Sublease Risks.

At the start of 2021 there was 369,000 RSF of Sublease office space for rent at One World Trade Center. Call for updates: (212) 509-4049,

7,530 RSF Furnished Sublease. Term thru 9/2025. Asking $58.00

Sublease from Conde Nast. 3 Floor totaling 99,079 RSF. Call for details.

Your Corporate HQ at One World Trade Center

Lobby

• Class A ultra-modern office building built in 2014

• 1,776 feet tall, the highest in the Western hemisphere

• 3,038,168 RSF total building area with 40,000 RSF floors and 104 floors

• 24- hour, 7- day access, uniformed lobby concierge, security monitoring and turn-style access cards for Tenants

• 71 fast passenger elevators and 12 escalators

• LEED Gold certification

• Owned and managed by Durst Corporation and the Port Authority of NY/NJ

• Alternate address: 285 Fulton Street, New York, NY 10007

Introducing One World Commons

Located on the 64th floor, One World Commons is a 25,000 square foot amenity space designed to attract, inspire and retain companies and their employees. This world-class social and business hub includes conference, meeting and event rooms, lounges, a game room and cafe.

ABOUT COGENT REALTY ADVISORS

Cogent Realty Advisors is an independent and licensed no fee Realtor with over 20 years of experience representing businesses that lease NYC office space. Our mission is to help you find the right office at the right price. For information, phone Mitchell Waldman at (212) 509-4049.

#oneworldtraderental2021

The post One World Trade Center Rental Guide 2021 appeared first on Rent NY Office.

Monday, January 11, 2021

Office Rental Market in Manhattan, Year End 2020

Manhattan Office Rental Market, Year End 2020. At the start of 2020 the New York office market showed no signs of slowing down. Leasing activity had recorded its highest two-year run of activity in this century. Developers were adding millions of square feet (SF) of new inventory and demand continued to outpace supply resulting in increasing rental rates.

Now looking back, the pandemics’ negative impact on the office market is apparent. Beginning in March 2020, the closure of essential businesses (retail, service, healthcare, financial, etc.) contributed to a migration of residents away from New York. Since then, the majority of companies continue to operate virtually and plan to do so for the foreseeable future. Office occupancies in New York are hovering around 20%, among the lowest in the nation. The work-from-home strategy has been both productive and cost-effective.

In 2020, long-term leasing transactions declined approximately 56% compared to 2019. The majority of new leases occurred in the tech sector and included large commitments by Facebook, Apple and TikTok who have the financial resources to weather the downturn. Much of the other leasing activity was renewals where companies obtained favorable terms to extend their leases for 3- 5 years.

There were more than 21 million-SF of office development projects under construction at the start of 2021. Although vacancy levels will be elevated in the coming years, developers are optimistic that future leasing activity will occur in the newest and highest quality buildings.

Increased vacancy and weak Tenant interest resulted in a decline in rental rates of 2.2% at year’s end 2020 versus 2019. (The actual decline is likely greater.) In the current Tenant-friendly environment asking rents are being discounted and incentives like rent abatements are increasing. Many Landlords are offering more flexible terms with shorter duration leases and even opt-out clauses.

Costar’s Analysis of the Manhattan Office Rental Market

CoStar is the world leader in commercial real estate information and has the most comprehensive database of real estate data throughout the US, Canada, UK, France, Germany and Spain.

Key Costar Manhattan Office Indicators:

Vacancy Rate: 10.4%
Market Rent: $57.65* (The rental income that a property would most probably command in the open market. This is the weighted average across all Manhattan office buildings.)
Under Construction: 21,889,096 SF
Total Rentable Building Area: 949,560,537 SF

Projections

The CRE Brokerage community is projecting Effective Rents* may be reduced 15%-20% from the peak recorded in 2019. This is consistent with the rent adjustments that occurred after 9/11. Notwithstanding, offices buildings that have a minimal amount of vacant units and a stable Tenant roster with long term lease commitments are less likely to offer significant discounts on their rent.

Office occupiers that are flexible in regards to their lease term and space design will secure the deepest rental discount with a Sublease. Refer to our recent report Sublease Risk & Rewards in 2020.