Three Reasons 'Overbuilt' Is Overplayed
Barclays has added a rumored 400k to 450k SF block at 1301 Ave of the Americas to Sixth Avenue's glut of available space. But one local expert gives us three reasons Sixth Avenue's sublease problem doesn't mean Midtown development should halt. (Don't trade in those shovels for jazz hands just yet.)
1) This isn't Field of Dreams
Developers aren't building and then hoping office tenants come, Avison Young NY tri-state prez Arthur Mirante tells us. Each planned project will go up only once 40% to 60% of space is pre-leased.
2) Demand ain't dwindling
We snapped 1301 Ave of the Americas this afternoon. Employment growth could be better, but NYC gained more than 100,000 office jobs over the past five years. Even if the next five turn in no better than a repeat performance (and it will be better, he says), the city will need at least 20M SF more office space at 200 SF/employee. 150 SF/employee, he says, is still aspirational for the market as a whole.
3) Corporations want new stuff
The hot topic in C-suites is recruiting and retaining talent. Well, efficient, sustainable space with high ceilings and lots of light helps companies do just that, says Arthur (whom we snapped with Moinian Group's Joe Moinian). And the more employees they hire, the more demand for this kind of new space rises. Arthur adds that new office space in emerging districts is even more appealing, by which we assume he's referring to Moinian's planned 1.9M SF 3 Hudson Blvd on the Far West Side, which Arthur is leasing.
Arthur also heads the team that's leasing 1501 Broadway, the landmark also known as the Paramount Building, for Levin Properties and other investors, which have put $25M into a capital improvement program. The 800k SF Times Square building, which we snapped this morning, also is the site for Bisnow's 5th Annual State of the Market event this Wednesday, where Arthur will be among 12 can't-miss experts speaking. Sign up here!