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As Midtown South Fills Up, Renewals Rise Further Uptown

NEW YORK CITY-While large corporate users are staying put in Midtown, many small- and mid-sized firms are continuing to flock to the Chelsea area, leaving few large blocks of space left, brokers explained during Cushman & Wakefield’s second quarter media briefing.

By Jacqueline Hlavenka | Updated on July 10, 2012

(Save the date: RealShare New York comes to the Grand Hyatt, New York, NY, October 9.)

NEW YORK CITY-For the second quarter in a row, Manhattan leasing activity was slightly below the long-term average, but select submarkets — like Midtown South — are steadily showing growth. According to mid-year data released by Cushman & Wakefield at a media briefing earlier this morning, the Manhattan market saw 5.4 million square feet of new leasing in Q2 2012, falling slightly below the 10-year average of six million square feet.

“Since 2008, it has been quite a wild ride,” said Bill Hartman, executive vice president at C&W, describing the chart above. “If you look at the brutal and severe and really brutal downturn we experienced in ’08 and ’09, the activity almost completely dried up, followed by some amazing numbers in 2010, finishing up with 10 million square feet in the second quarter of 2011. If you compare that to the second quarter of 2012, it is more than double. For the last 12 months, we went right up the rent line. While it is not extremely robust, it is stable growth.”

In Midtown, Hartman explained that much of the activity is related to large lease renewals. From Viacom’s 1.3 million-square-foot renewal at 1515 Broadway and Citibank’s re-up at 601 Lexington, renewal activity for the first half of 2012 came in at 6.8 million square feet, just 1.3 million square feet less than all of the renewal activity recorded in 2011, which Hartman described as a sign of the times.

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