Office leasing is strong in all markets as established companies latch onto modern glass towers while tech companies venture to historical and visually interesting buildings with modern infrastructure.
“Companies are using space in dramatically different ways,” said Gregg Lorberbaum, a partner with Centric Real Estate Advisors. “You have open space and cooperation and horizontal layouts to make collaborative, flexible and open spaces.”
Rather than saving money, renewing and remaining in place — perhaps while shifting within the building on a temporary basis for a modest painting and recarpeting — companies are planning full moves to another property, even if it is in the same locale.
White & Case, for instance, will move to 440,000 square feet at 1221 Ave. of the Americas from its current 300,000 square feet down the avenue at no. 1155.
The fashion firm New York & Company will move from 450 W. 33rd to 176,932 square feet at nearby 330 W. 34th and Grant Thornton will move from 666 Third Ave. to 130,357 square feet at 757 Third.
Time Warner leased back 975,624 square feet at the Time Warner Center while its 1.5 million-square-foot offices are being constructed by Related at the north tower of Hudson Yards. Related also purchased that office condo piece for $1.31 billion.
Building owners in Midtown South are being more selective since the demand outpaces the supply, explained Andrew Roos, vice chairman of Colliers International, who has spaces available in Chelsea. “Since they have to lay out money for work, they are being selective with respect to the economics and the tenant’s business,” said Roos.
There is also a steady march into downtown as the numerous Class A availabilities and lower rents are attracting varied but corporate tenancies. “Downtown has a lot of action and 40 years ago, when I began in real estate, it was another country,” said Michael Laginestra, vice chairman of CBRE.
Brookfield Place is filing in quickly. The law firm Jones Day will relocate to 330,000 square feet at 250 Vesey St. from its current tower at 222 E. 41st St., while publisher Time, Inc. is exploring a move from 1271 Ave. of the Americas to 650,000 square feet at Brookfield’s 225 Liberty St.
High rents and the Googleization of Chelsea is sending a division of the Drug Enforcement Agency from 85 Tenth to 56,000 square feet at Brookfield’s 250 Vesey St.
Similarly, the Institute of Culinary Education will move from 50 W. 23rd St. to 71,000 square feet at Brookfield’s 225 Liberty St.
Another publisher, Harper Collins, will move from 10 E. 53rd St. to 185,000 square feet at 195 Broadway.
“The tenants are speaking and casting their votes about Lower Manhattan,” said John Wheeler, head of the downtown office for JLL, who has restructured how they divvy up the area’s submarkets that includes a new designation for the Water Street Corridor.
MacMillan Science & Education will consolidate several locations to 176,121 square feet at One New York Plaza. Cosmetics giant Revlon also signed a deal here for the top two floors of 91,194 square feet in a game-changing move from 237 Park Ave. next to Grand Central Terminal.
“With Revlon coming, downtown has arrived,” said Mark Jaccom, president of the tenant-rep firm Cresa New York, who was not involved in that transaction but has others on the way.