Commercial leasing activity in Manhattan up 100% year over year in the first quarter

Like the proverbial elephant being examined by five blind men, Manhattan’s 460 million square foot office market lends itself to many different interpretations. There is one statistic that supports every perspective.

A new report from CBRE happily names a nearly 100% year-over-year increase in leasing activity for the first quarter of 2022. The 5.68 million square feet of transactions increased 96% over the first quarter of 2021.

Such big deals as IBM Inc. at 1 Madison Ave. (328,000 square feet), PDT Partners at 60 Columbus Circle and Celonis at 1 World Trade Center (75,000 square feet) are pointing to a major market recovery.

Average asking rents in Midtown increased 2% sequentially. Letting volume in Midtown South grew for the third straight quarter. Downtown’s quarterly absorption was positive for the first time since Q3 2019.

All good news, right? But there is a different take in JLL’s latest Office Insight letter. The brokerage firm saw vacancy rates rising across the board, in part due to subletting inflows exceeding demand.

Celonis leased 75,000 square feet of space at 1 World Trade Center.
Paul Martinka for the NY Post

It found that first-quarter leasing was higher than in early 2021, but 25% below the fourth quarter.

Large new sublease listings “propelled vacancy to its highest level since the pandemic began at 15.2 percent.”

None of the data is wrong – it’s more about which facet of the market to highlight.

1 Madison Ave. now houses IBM Inc. on 328,000 square feet.
Zandy Mangold for the NY Post

Meanwhile,, a website that tracks foot traffic in office buildings, reports a huge 102% increase in foot traffic in Manhattan office buildings in February over the same month in 2021. But traffic was still 46.7% below January 2020, just before the pandemic hit.

“The city has been coming back to life since early April, but progress is slow,” the website reads.

In one of the largest new subleases of the year, Phaidon International takes over 71,239 square feet at 711 Third Ave. by SL Green. The global specialist recruitment agency is headquartered at 622 Third Ave. to move where the company had only about half as much space.

David Mainthow of Cushman & Wakefield represented Phaedo. JLL represented the sub-lessor, the Stagwell Group.

Phaidon International will be 71,239 square feet at 711 Third Ave. in one of the biggest new sublets of the year.
Imogen Brown for the NY Post

Harry Youtan, CEO of Phaidon, said the move is “the next step in an extraordinary eight-year growth in New York. This will allow us to hire and develop an additional 200 people, bringing our New York team to a total of 500.”

“The premises were delivered turnkey, resulting in low capital investment and upfront construction time, which was a great solution for Phaidon’s thriving business,” said Mainthow.

The new address is a 592,772-square-foot tower one block from Grand Central Terminal. It has been renovated with improvements including new elevator cabs, large windows, and a three-story parking garage.

Marx Realty’s 10 Grand Central, a 500,000-square-foot midcentury skyscraper at Third Avenue and East 44th Street, continues to fill up thanks to a recent $48 million capital improvement program and repositioning.

Marx Realty’s 10 Grand Central continues to fill with 34,000 square feet of new and expanded leases.
Courtesy of Marx Realty

Of 34,000 square feet of newly signed and expanded leases, the largest was a 12,000 square foot expansion of HLTH, a health innovation conference organizer. The new lease, plus an extension of the existing space, increased the company’s space in the building from 7,000 to 19,000 square feet.

Marx also signed 15,000 more square feet for LIV Golf Inc, Family Management Corp and Kasa Living. On the retail front, Mediterranean fast-casual eatery CAVA occupies 2,600 square feet of corner space on the ground floor.

Marx has converted more than half of 46 previously unused outdoor terraces for tenant use. Upgrades also include a new four-story entrance portal on East 44th Street with walnut doors leading into an elegant lobby, and an indoor/outdoor club floor with its own lounge, conference room and landscaped patio.

An additional sweetener: Israeli-made “solato” machines that let tenants make gelato with different flavors in seconds. Realty Check can attest that at least the vanilla is the real deal.

Around 65,000 square meters are still available – which pleases Marx CEO Craig Deitelzweig, since the previous tenants paid rents well below today’s market price. Asking rents at 10 Grand Central now range from $65 to $120 per square foot. Commercial leasing activity in Manhattan up 100% year over year in the first quarter


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