FIRE, Health Care Drive NYC Leasing

Merrill Lynch signed a lease for 122,418 square feet at the newly renovated 75 Rockefeller Plaza.

NEW YORK CITY—Midtown was the hot location and the traditional FIRE sector dominated leasing activity in the second quarter of this year, Newmark Grubb Knight Frank reports. In its latest market report on the Manhattan office market, the brokerage firm notes that leasing activity totaled 9.8 million square feet in the second quarter, slightly higher than activity posted three months earlier. In the first half of this year, 19 million square feet of lease deals have been negotiated, slightly beating out the 18.9 million square feet registered after the first six months of 2015. The FIRE (financial, insurance and real estate) sector accounted for 51% of the total square footage leased in the second quarter in Manhattan, paced by UBS’ 890,861-square-foot renewal at 1285 Ave. of the Americas. McGraw Hill Financial’s 900,000-square-foot renewal at 55 Water St. bolstered the FIRE sector’s dominant position in the first quarter of this year. The report—authored by Newmark Grubb Knight Frank’s Jonathan Mazur, managing director, research, and Stephanie Jennings, tri-state director, research—notes that nine of the top 10 lease deals in the second quarter were for space in Midtown Manhattan. Midtown posted is strongest quarter of leasing in 10 years, totaling 7.2 million square feet of deals. “Renewals and expansions accounted for much of the leasing, particularly in the Sixth Avenue/Rockefeller Center and Grand Central submarkets,” the report states. Other sizable Midtown deals included: D.E. Shaw’s 195,375-square-foot renewal at 1166 Ave. of the Americas, law firm Alston & Bird’s renewal deal totaling 122,525 square feet at 90 Park Ave. and New York Life’s renewal and expansion of 114,709 square feet at 420 Lexington Ave. Manhattan’s overall availability rate was flat at 11.1% as compared to the first quarter and down slightly from the 11.3% rate posted after the second quarter of 2015. Health care-related companies were involved in two of the four largest lease deals signed in the borough in the second quarter— Langone Medical Center’s 30-year triple net lease for the entire 222 E. 41st St. building (389,522 square feet) in April and the Visiting Nurse Services of New York’s acquisition of a condo interest at 220 E. 42nd St. in May that will provide the agency with 237,434 square feet at the property. VNS will relocate to the building from space at 1250 Broadway. The TAMI (tech, advertising, media and information) sectors suffered a decrease in leasing activity in the second quarter, NGKF reports, accounting for just 17.9% of all lease deals during that period, compared to 34.4% in the first quarter and 29.4% for all of 2015. Large transactions at newly constructed or renovated properties in the second quarter included PricewaterhouseCoopers’ 240,605-square-foot lease at 90 Park Ave., Merrill Lynch’s relocation to 122,418 square feet at the newly renovated 75 Rockefeller Plaza and Point72 Asset Management’s letter of intent for 175,000 square feet at 55 Hudson Yards.