Big Footprints: 8 Major NYC Office Leases Inked So Far This Year
The New York City office leasing market has been reshaped in recent years. New buildings have set a higher bar for tenant expectations and coworking operators have tightened their grip across the market. Meanwhile, an entirely new office market on Manhattan’s Far West Side in the form of Hudson Yards has begun to come to fruition.
Despite all this new supply, rents have climbed and leasing volume has continued at a cracking pace — with big leases inked all across the city this year. Last year saw one of the best years on record, and 2019 has continued at a similarly rapid pace.
The first three months of the year was the second-best leasing volume quarter in the last five years, according to Savills data. Here’s a look at some of the biggest office leases inked through May in New York City, according to Colliers International.
NYC Health + Hospitals
Building: 50 Water St. (formerly 7 Hanover Square)
Space: 527K SF
In the biggest lease of the year so far, NYC Health + Hospitals in January signed on for 526,552 SF at GFP Real Estate and Northwind Group’s 50 Water St. The 25-year, $758M deal will save the nonprofit — which runs public hospitals and healthcare facilities — some $203M over the course of the lease, as it consolidates offices there and reduces its footprint by 20%.
GFP and Northwind are revamping the building, previously known as 7 Hanover Square, and turning it into two separate entities with addresses of 50 Water St. and 100 Pearl St.
Building: 55 Water St.
Space: 439K SF
Last month, EmblemHealth decide to stay on at 55 Water St., renewing for a total of 439,080 SF in the building. There had been talk that the healthcare company might leave, and its decision to stay was a major coup for the downtown area.
Building owner New Water Street Corp. — an entity of the Retirement Systems of Alabama — also locked down a big lease earlier this month with tech human resources firm Justworks, a deal that will see that company leave the Starrett-Lehigh Building next year.
New York City Department of Citywide Administrative Services (Human Resources Administration)
Submarket: Downtown Brooklyn
Building: 240-252 Livingston St.
Space: 342K SF
In a major deal in the outer boroughs, Clipper Equities inked a 10-year renewal with the city agency that oversees welfare, food stamps and homeless services. The New York City Human Resources Administration's decision to stay put at 250 Livingston St. means a new lease will start in August 2020, and will see the city paying $14.9M a year at first, gradually rising to $16.9M. Clipper said in a release that it expects the new lease to initially add around $5M to the Downtown Brooklyn property’s annual net operating income.
Building: 1271 Sixth Ave.
Space: 320K SF
Rumors were swirling late last year that the finance and insurance giant AIG was eyeing space at Rockefeller Group’s 1271 Sixth Ave. The finance and insurance giant has now locked down a lease for 320,237 SF, per Colliers. The building, which is undergoing a $600M makeover, has also signed other major tenants in law firm Latham & Watkins and Major League Baseball.
Akin Gump Strauss Hauer & Feld LLP
Building: One Bryant Park
Space: 280K SF
When Akin Gump signed up for space at One Bryant Park some 13 years ago, its rent of $100 per SF was one of the highest prices ever paid for such a large block of space, according to a 2006 New York Post report.
The firm is staying on at the building, also known as Bank of America Tower — in the first quarter of the year it renewed for 280K SF there, even as its longtime law firm neighbor McKool Smith decided to relocate to One Manhattan West, which opens this summer.
Building: 300 Park Ave.
Space: 242K SF
Last month, global consumer products company Colgate-Palmolive announced it is keeping its global headquarters at Tishman Speyer’s 300 Park Ave. But at 241,657 SF, the maker of Irish Spring, Speed Stick and Ajax is shrinking its space there, Crain's New York Business reported. Colgate-Palmolive had previously leased 312K SF in a deal that ran until 2023.
The deal also meant that Tishman Speyer had to drop the idea of building a new tower at the site under the Midtown East rezoning. The landlord had starting putting in clauses for demolition in leases, per Crain’s, to allow it to ask tenants to leave in order to knock down the building. But Colgate-Palmolive objected, and Tishman left it out to keep the tenant.
BMO Capital Markets
Building: 151 West 42nd St./4 Times Square
Space: 215K SF
BMO Capital Markets, the investment banking subsidiary of the Bank of Montreal, agreed to take 215K SF at Durst Organization’s 151 West 42nd St. — known as 4 Times Square — back in April. The deal sees the bank moving across the street from its current location at 3 Times Square.
Much of BMO’s space is in some of the area left behind by Condé Nast’s departure for One World Trade Center, but it is also taking 48K SF of law firm Skadden Arps’ old space. Skadden announced back in 2015 that it would be leaving the building for Brookfield’s One Manhattan West, where it will take 635K SF.
VMLY&R (Young and Rubicam)
Building: 3 Columbus Circle
Space: 214K SF
Back in March, The Moinian Group took full control of the 683K SF office tower at 3 Columbus Circle when it bought out its office anchor, VMLY&R — previously known as Young & Rubicam.
Following the deal, for which Moinian used part of a $595M commercial mortgage-backed security loan from J.P. Morgan and Deutsche Bank and a cash equity, VMLY&R leased back its space, making it one of the biggest lease deals of the year so far.
CORRECTION, JUNE 27, 5 P.M. ET: Tishman Speyer owns 300 Park Ave. An earlier version of this story used an image of a different building. This story has been updated.