Manhattan-Office-Monthly-Snapshot

RESEARCH JULY 2020 MANHATTAN MONTHLY SNAPSHOT ACTIVITY IMPROVES FOLLOWING EASE CURRENT CONDITIONS OF SOCIAL DISTANCING REGULATIONS July marked a strong start to the third quarter, with nine 100,000-square-foot There were nine leases of at least 100,000 square feet signed in July, which deals signed. Velocity posted at 2.7 million square feet. exceeds the total that had been signed from the start of the COVID-19 pandemic through the second quarter. However, just two of these deals were The availability rate was recorded at 12.4%, a monthly increase of 50 basis points. Given the high proportion of renewals, absorption posted at negative relocations – AIG’s 217,638-square-foot lease at 28 Liberty Street and 3.1 million square feet. Raymond James’ lease for 160,000 square feet at 320 Park Avenue. Approximately 930,000 square feet, 34.7% of activity, was from tenant Asking rents were stable from last month, closing July at $80.88/SF. relocations. July’s 2.7 million square feet in leasing activity surpassed levels in each of the prior four months and was 66.2% above the monthly average since the pandemic began. However, the large percentage of renewals MARKET ANALYSIS caused absorption to fall to negative 3.1 million square feet. Asking Rent and Availability The Manhattan availability rate increased by 50 basis points to 12.4% as four $82 14.0% large blocks of at least 100,000 square feet came to market. Available $79 sublease space increased by 900,000 square feet during the month. Asking 13.0% $76 rents were flat from last month, coming in at $80.88/SF, as none of the 12.0% markets saw changes greater than $0.50/SF. $73 11.0% MIDTOWN $70 10.0% Midtown’s availability rate increased 30 basis points from June to 12.8%, $67 following three large-block additions. These included 380,000 square feet of $64 9.0% space in Hudson Yards formerly occupied by Neiman Marcus; 114,230 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Average Asking Rent (Price/SF) Availability (%) square feet at 149 Madison Avenue previously taken by WeWork; and a 113,442-square-foot sublease from IPG at 5 Manhattan West. Net Absorption (SF, Millions) NBC/Comcast completed July’s largest deal, a 339,833-square-foot extension at 1221 Avenue of the Americas. Raymond James signed Midtown’s third 1.5 largest relocation year to date at 320 Park Avenue after forgoing renewal options. Other top deals included renewals by BNP Paribas, iHeart Radio/Katz 0.5 Media Group, Goodwin Procter and Perella Weinberg at 787 Seventh Avenue, -0.5

125 West 55th Street, 620 Eighth Avenue, and 767 Fifth Avenue, respectively. -1.5 MIDTOWN SOUTH -2.5 Two of Manhattan’s largest deals were signed in Midtown South. The City of -3.5 New York and Quinn Emanuel renewed their leases for 174,186 square feet at Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 260 Eleventh Avenue and for 171,000 square feet at 51 Madison Avenue, respectively. Despite the uptick in activity, the availability rate jumped 70 MARKET SUMMARY basis points to 10.8%, the largest month-over-month increase of the three Current Prior Year Ago 12 Month markets. Asking rents dropped by $0.50/SF from June to $84.19/SF. Month Month Period Forecast Total Inventory 460.7 MSF 460.3 MSF 453.4 MSF  DOWNTOWN AIG signed for 217,638 square feet at 28 Liberty Street. The insurance Availability Rate 12.4% 11.9% 11.4%  company also announced a lease at 1271 Avenue of the Americas and will be Monthly Net Absorption -3,142,446 -1,441,272 1,042,278  moving from 80 Pine Street and 175 Water Street, where the lone Downtown Average Asking Rent $80.88 $80.98 $78.06  large block, of 685,000 square feet, came available. This addition drove the availability rate up 60 basis points to 12.5%. Downtown asking rents were Under Construction 16.1 MSF 16.1 MSF 16.9 MSF  stable at $63.98/SF. Deliveries 0 MSF 0 MSF 0 MSF 

SIGNIFICANT LEASE TRANSACTIONS

Tenant Address Market/Submarket Type Square Feet Sixth Avenue/Rockefeller NBC/Comcast 1221 Avenue of the Americas Direct Renewal 339,833 Center

NBC’s parent company Comcast extended its lease for one year at 1221 Avenue of the Americas for 339,338 square feet, the largest deal this month.

BNP Paribas 787 Seventh Avenue Westside Direct Renewal 323,000

BNP Paribas renewed its lease for 323,000 square feet, shrinking its footprint from more than 450,000 square feet.

Sixth Avenue/Rockefeller iHeart/Katz Media Group 125 West 55th Street Direct Renewal 259,468 Center

iHeart renewed its space at 125 West 55th Street, the building’s second large renewal after Macquarie renewed in the third quarter of 2019.

AIG 28 Liberty Street Downtown East Direct New 217,638

AIG signed 217,638 square feet at 28 Liberty Street in one of three deals announced during July, as the insurance company shifted its portfolio.

Goodwin Procter 620 Eighth Avenue Times Square South Direct Renewal & Expansion 216,419

Goodwin Procter renewed and expanded its lease at 620 Eighth Avenue across seven floors for an additional five years.

SUBMARKET STATISTICS

Total Monthly Net YTD Net July-20 Total June-20 Total July-19 Total July-20 Avg. June-20 Avg. July-19 Avg. Inventory Absorption Absorption Availability Availability Availability Asking Rent Asking Rent Asking Rent (SF) (SF) (SF) Rate Rate Rate (Price/SF) (Price/SF) (Price/SF)

Midtown – A 229,413,649 -1,256,065 -1,664,277 13.2% 12.9% 13.0% $92.19 $91.53 $88.14

Overall 288,710,125 -1,879,795 -3,032,299 12.8% 12.5% 12.2% $85.78 $85.76 $83.36

Midtown South - A 18,201,247 -83,644 -542,810 13.4% 12.9% 7.7% $109.20 $109.21 $96.61

Overall 76,602,740 -562,321 -1,791,884 10.8% 10.1% 7.8% $84.19 $84.69 $79.26

Downtown - A 75,150,588 -615,025 -399,802 12.9% 12.1% 12.5% $65.11 $65.05 $64.33

Overall 95,425,530 -700,330 -478,231 12.5% 11.9% 12.1% $63.98 $63.83 $62.94

Manhattan - A 322,765,484 -1,954,734 -2,606,889 13.1% 12.7% 12.6% $86.84 $86.57 $82.47

Overall 460,738,395 -3,142,446 -5,302,414 12.4% 11.9% 11.4% $80.88 $80.98 $78.06

JONATHAN MAZUR STEPHANIE JENNINGS ALISON BAUMANN STEPHEN TSAMBLAKOS Senior Managing Director Managing Director Associate Director, Research Senior Research Analyst 212.372.2154 212.372.2099 [email protected] [email protected] MICHAEL MICELI RONNIE WAGNER Associate Director, Research Director, Research

Newmark Knight Frank has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in our data, there may be adjustments in historical statistics including availability, asking rents, absorption and effective rents. Newmark Knight Frank Research Reports are available at www.ngkf.com/research

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