Property Types
Office
Jun 22, 2009
By: Paul Rosta, Senior Associate Editor
Cinching a major Class A office lease in Manhattan is anything but a slam dunk these days. By that measure, Olympic Tower Associates’ signing of NBA Properties Inc. to a 10-year, 153,000-square-foot renewal at 645 Fifth Avenue looks like the real estate equivalent of a three-point shot at the buzzer.
Disclosed on Thursday, the deal marks Manhattan’s third largest renewal by size and the fifth biggest lease of 2009. Among leases in the Midtown submarket, only Bloomberg L.P.’s 180,000-square-foot renewal and expansion is larger. NBA Properties, the National Basketball Association’s licensing and marketing affiliate, re-upped for 10 more years in the Class A office tower it has occupied for more than thirty years. Terms also include an option for an additional five years, plus an option to take two additional floors.
Multiple landlords attempted to lure NBA Properties to other locations in Manhattan and across the Hudson River in nearby New Jersey, according to a statement by Harry Seherr-Thoss of FirstService Williams, who headed an owner’s rep team that also included Mark Jaccom, Robert Freedman, Richard Plehn Sr. and Christina Plakopita. NBA Properties Inc. was represented by Barry Gosin, Moshe Sukenik and Corey Borg of Newmark Knight Frank in the lease deal.
NBA Properties inked the lease in an environment where tumbling prices and leasing velocity continue to give tenants the edge. Class A asking rents in Midtown slipped from $73.99 per square foot in April to $69.23 in May, according to Colliers ABR Inc. That represents a falloff of $30 per square foot since May 2008. Midtown Manhattan’s office availability rate reached a 15-year high of 15.2 percent in May, reports CB Richard Ellis Inc.
Midtown’s leasing volume totaled only 620,000 square feet last month, a decrease of more than 50 percent from the submarket’s five-year rolling average. Absorption continues to head sharply in the wrong direction, as the Midtown market has taken back 7.47 million square feet since the beginning of the year--more than three times the negative absorption Midtown had sustained at the same point in 2008.
Availability has risen 3.3 percent so far this in 2009, and CB Richard Ellis expects the rate to rise at a slower pace before leveling off late this year. Sublease space is adding significantly to that inventory, accounting for one third of the 34 million square feet available. At 5.1 percent, Midtown’s sublease availability rate at its highest level since September 2003. The latest Midtown blue-chip tenants to put big blocks of sublease space on the market are JPMorgan Chase & Co., which just made 411,000 square feet at 277 Park Avenue available, and Time Inc., which is marketing 320,000 square feet at 1271 Avenue of the Americas.
By: Paul Rosta, Senior Associate Editor
Cinching a major Class A office lease in Manhattan is anything but a slam dunk these days. By that measure, Olympic Tower Associates’ signing of NBA Properties Inc. to a 10-year, 153,000-square-foot renewal at 645 Fifth Avenue looks like the real estate equivalent of a three-point shot at the buzzer.
Disclosed on Thursday, the deal marks Manhattan’s third largest renewal by size and the fifth biggest lease of 2009. Among leases in the Midtown submarket, only Bloomberg L.P.’s 180,000-square-foot renewal and expansion is larger. NBA Properties, the National Basketball Association’s licensing and marketing affiliate, re-upped for 10 more years in the Class A office tower it has occupied for more than thirty years. Terms also include an option for an additional five years, plus an option to take two additional floors.
Multiple landlords attempted to lure NBA Properties to other locations in Manhattan and across the Hudson River in nearby New Jersey, according to a statement by Harry Seherr-Thoss of FirstService Williams, who headed an owner’s rep team that also included Mark Jaccom, Robert Freedman, Richard Plehn Sr. and Christina Plakopita. NBA Properties Inc. was represented by Barry Gosin, Moshe Sukenik and Corey Borg of Newmark Knight Frank in the lease deal.
NBA Properties inked the lease in an environment where tumbling prices and leasing velocity continue to give tenants the edge. Class A asking rents in Midtown slipped from $73.99 per square foot in April to $69.23 in May, according to Colliers ABR Inc. That represents a falloff of $30 per square foot since May 2008. Midtown Manhattan’s office availability rate reached a 15-year high of 15.2 percent in May, reports CB Richard Ellis Inc.
Midtown’s leasing volume totaled only 620,000 square feet last month, a decrease of more than 50 percent from the submarket’s five-year rolling average. Absorption continues to head sharply in the wrong direction, as the Midtown market has taken back 7.47 million square feet since the beginning of the year--more than three times the negative absorption Midtown had sustained at the same point in 2008.
Availability has risen 3.3 percent so far this in 2009, and CB Richard Ellis expects the rate to rise at a slower pace before leveling off late this year. Sublease space is adding significantly to that inventory, accounting for one third of the 34 million square feet available. At 5.1 percent, Midtown’s sublease availability rate at its highest level since September 2003. The latest Midtown blue-chip tenants to put big blocks of sublease space on the market are JPMorgan Chase & Co., which just made 411,000 square feet at 277 Park Avenue available, and Time Inc., which is marketing 320,000 square feet at 1271 Avenue of the Americas.
Recent Office Headlines
Aug 07, 2009
Aug 06, 2009
Jul 31, 2009
Jul 30, 2009
Jul 30, 2009
Subscribe to this blog's feed
