NEW YORK CITY—Hudson Square remains one of the city's busiest neighborhoods after leasing more than 550,000 square feet of office space in 2015, according to a new year-end commercial market report, released Wednesday by the Hudson Square Connection. While building renovations at One Soho Square nearly pushed the overall vacancy rate up to 7.4% last year, the remainder of the commercial office portfolio closed with a 4% vacancy rate.
As office space availability remained low, rents continued to rise in Hudson Square during 2015. Premium spaces called for asking prices in the mid $80s per square foot. The fourth quarter average asking rent closed at nearly $68 per square foot, compared to $66 in Midtown South and $60 for all of Manhattan.
"As clearly demonstrated by the data in our annual market report, Hudson Square continues to show extraordinary strength as a creative hub," says Ellen Baer, president and CEO of the Hudson Square Connection. "More and more healthy food choices, green infrastructure and a campus-like environment make Hudson Square a place where creative people and businesses can thrive. As the neighborhood continues as a magnet for technology, advertising, media and information businesses, we expect vacancy rates to remain low."
The most notable Hudson Square sales transaction in 2015 was Norges Bank Investment Management's acquisition of 44% interest in Trinity Real Estate's portfolio for $1.56 billion in which over three million square feet are in Hudson Square. The properties that are located in Hudson Square include 75 Varick St., 170 Varick St., 345 Hudson St., 350 Hudson St. and 155 Ave. of the Americas.
The top five office leases of 2015 account for nearly 323,000 square feet, representing about 60% of all leasing activity for the year and over 100,000 more square feet than the top five deals of 2014. The largest office lease was for anchor tenant Horizon Media, which expanded their presence by more than 150,000 square feet and represented the largest third quarter lease for Midtown South.
During 2015, Hudson Square's retail vacancy rate also continued its decline, closing at 7.7% as the inventory remained constant and new leases were signed. While the area continues to have largely workforce-oriented retail dominated by the fresh food-and-beverage sector, signed leases also included a 1,900 square-foot Vespa storefront at 80-92 Varick St. and a planned experience center that would become the first major lifestyle tenant in the neighborhood.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
