Real estate surveys indicate Manhattan’s office market is far from dead

Steve Cuozzo

realty check

Separate reports by major brokerages CBRE and JLL show that the Manhattan office market is far from dead — or even stagnant.

The surveys illustrate the extent to which the top tier of the office market is “impervious” to woes at the lower end, as CBRE phrased it. (The data from both firms include both new leases and renewals.)

Tucked into CBRE’s survey of Manhattan office leases signed for $100-and-up per square foot in 2023 — there were 128 of them, including two for $200-plus — was another stunning statistic:

Availability on the prime corridor of market-driving Park Avenue was just 9.4% at year’s end, compared with overall Manhattan availability of 20%.

What little space remains available on the boulevard is going fast.

As we recently reported, PJT Partners expanded at SL Green’s 280 Park Ave. and Stonepeak Partners signed at SLG’s 245 Park.

PJT Partners expanded at SL Green’s 280 Park Ave. Stefano Giovannini

Meanwhile, JLL reports a higher number than CBRE in the “$100-plus club” — an awesome 191 deals (its sample includes some laboratory and bio-medical leases).

The report by a JLL team led by Cynthia Wasserberger noted that Aby Rosen’s Seagram Building at 375 Park Ave. had a dozen transactions at $100 or more, the most in a single building.

Locations with the most square feet leased at a minimum of $100 per square foot were 350 Park Ave. (485,460 square feet); 20 Hudson Yards (432,085 sf); 280 Park Ave. (398,535 sf); and 550 Madison Ave. (303,543 sf).

The Seagram Building had a dozen transactions at $100 or more. Stefano Giovannini

Wasserberger said, “While many tenants focused on right-sizing operations over the past few years, 2023 was all about growth and expansion among larger occupants.”

“Tenants in the 10 largest top-tier transactions all expanded and grew appreciably in their new commitments,” she said.”

It might be another few weeks before all the year-end lease signings come to light. But one major tenant that expanded was DoorDash, which inked a direct lease for 115,382 square feet at 200 Fifth Ave. on Dec. 23. The building is owned by a joint venture of Boston Properties and J.P. Morgan Global Alternatives.

The deal marks significant growth for the online food delivery platform, which previously occupied only half as much space under a sublease.

The now fully-leased, 860,000 square-foot, modernized prewar tower is home to Tiffany’s global headquarters among other A-list office tenants, but is best known to the public as home to Eataly’s Manhattan flagship store.

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