The city’s office market is wearing smaller size shoes because of the pandemic – but the footprint shrank far less than fears.
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New York City’s 100 largest office tenants have decreased by just 7.4 percent since the start of the pandemic, according to a new survey by leading brokerage CBRE.
After the pandemic broke out in April 2020, some brokers and analysts had predicted up to 25 percent reductions in the half-billion-square-foot offices of the Big Apple.
Stamford, Conn.-based real estate investment firm Land & Buildings predicted an “existential storm” in May of that year that would devastate the Manhattan market.
But the unexpectedly modest cuts tracked by CBRE, combined with strong large-scale leasing in recent months, suggests that fears of work-from-home have not crippled the market – at least not yet. .
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“The largest 100 occupants represent a third of all Manhattan office space,” CBRE dealmaker Paul Myers told The Post. “And the biggest users drive the entire market.” “We don’t have all the figures yet, but I really think the smaller companies are expanding more than the larger companies,” Myers said.
Myers said it was too early to tell what effect the new Omicron version would have on office leasing, but added that he “expected” it to be “with even smaller than the minimal impact from the Delta version.”
Developer-landlord William Rudin, whose family-owned empire controls tens of millions of square feet of Manhattan and Brooklyn office space, said “I’m not surprised” to hear about the report’s findings, which he hadn’t seen yet. .
“We see strong demand and leasing activity across our portfolio, which includes Dock 72″ [at the Brooklyn Navy Yard], I think this report will validate what we are seeing.”
Rudin said potential tenants are enthusiastically visiting 80 Pine St. and Three Times Square, two Rudin properties that are vacant, and deals are likely to be signed soon.
CBRE had earlier reported that third quarter leasing was the strongest since the start of the pandemic. The 5.88 million-square-foot 3Q total jumped 70 percent from 2Q, which is still in high availability.
The expansion was followed by Facebook and Blackstone to help offset the contraction by companies such as Condé Nast-owned Advance.
The Spiral at 550 Madison Avenue, at least 100,000 square feet of jumbo new leases signed this year for Turner Construction at Chubb Group, OneFiveOne (formerly Four Times Square), legal at 919 Third Avenue in Mintz, Levin Kohn Firm Venable. and Schrödinger Inc. 1540 on Broadway. In February, Suntory signed on for 100,000 square feet at 11 Madison Avenue.
“Not exactly a market on its last legs, is it?” Introduced to a famous press-shy landlord. More jumbos are in the works. Real estate brokerage Cushman & Wakefield, a main competitor of CBRE, is “circling” 660 Fifth Avenue for up to 250,000 square feet for its own use, sources said.