Landlords celebrate Manhattan’s premium-lease boom in 2022

As Manhattan’s office market wobbles unceremoniously into 2023, with rising availability and shrinking corporate footprints, some landlords have at least something to celebrate: the number of new leases signed for more than $100 per square foot. record number.

The year 2022 sees 77 leases in the C-Note Club, up from 56 in 2021, according to a new survey by JLL.

According to JLL’s year-end recap, leases signed at $100 per square foot totaled 6.1 million square feet, more than double the amount of premium-priced floor space signed in 2021.

The report by JLL vice-chairman Cynthia Wasserberger, who worked with colleagues Carly Palmer and Margaux Kelleher, offered several startling statistics:

  • An unprecedented fifteen transactions for a total of 280,000 square feet had starting rents in excess of $200. At One Vanderbilt at SL Green, two separate short leases hit $300 psf.
  • Leasing was dominated by “quality flights”, which were run to brand-new towers and older ones which had been significantly upgraded. In fact, 62% of prized new leases were in such properties.
  • The landlords that landed the most premium-rent tenants were Brookfield Properties, with 16 deals totaling 1.6 million square feet; SL Green with 17 deals for 842,000 sf; Related Companies with 11 deals for 703,000 sf; and RFR Realty which closed 19 deals for 386,000 sf.

JLL did not name specific tenants in the $100-and-up club. But mega-deals reported in 2022 included GFL Environment at One Vanderbilt on SL Green; IBM at One Madison at SL Green, the Durst Organization’s Global Relay UA at 1155 Sixth Avenue; Vista Equity Partners at Relat K 50 Hudson Yardsand PDT and Deutsche Bank at Relat’s Deutsche Bank Center at Columbus Circle.

a Vanderbilt
GFL Environment at One Vanderbilt at SL Green was one of the mega-deals reported in 2022.
Anthony Quintano via Flickr
50 Hudson Yards
Vista Equity Partners had another premium lease last year at Relat’s 50 Hudson Yards.
Kyodo News via Getty Images

Not every sky-priced lease was for less space than a tenant, but all reflected the enormous “quality flight” that gives owners of Class A-plus properties a huge advantage over the rest of the sector.

Wasserberger called the premium-lease boom “further evidence of the resilience and relevance of top-of-the-market properties.”

“Many tenants chose to commit to high-end space while focusing on right-sizing their operations post-Covid,” Wasserberger said.

“Right-sizing” usually means downsizing. Was a classic 2022 affair KPMG leases 450,000 square feet at Brookfield’s Two Manhattan West, The largest single new lease of the year actually represents a loss of 350,000 square feet from KPMG’s existing three locations.

However, how much the firm is paying for its new digs is not known.

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