Why tenants are inking deals in NYCs unbuilt…
Prime Midtown workplace buildings are so full that the most important tenants are inking leases for towers that gained’t open their doorways for another 5 to seven years.
Citadel has leased half of the future 350 Park Ave. Deloitte is transferring from Rockefeller Center to 70 Hudson Yards, now in development. C.V. Starr goes to the eventual 343 Madison Ave. And Simpson Thacher snagged the decrease portion of Gary Barnett’s 570 Park Ave. — which, sources said, is being redesigned into a bigger, 1.6 million-ish sq. ft to accommodate the law firm’s growth and entice other tenants that pays more for the top of that tower.
“It is a game of musical chairs with large tenants jockeying for the next site to be built,” said Jonathan Mazur, who oversees research at Newmark.
Deloitte is ditching its home at Rockefeller Center and heading for a horny, new tower at 70 Hudson, which is now underway. Related
A developer for the Roosevelt Hotel website and a new operator for the Chrysler Building have also yet to be chosen, leaving those distinguished properties in flux.
SL Green, the town’s largest building proprietor, is in discussions with a “great” workplace tenant for 1515 Broadway — where its lease with Skydance has over three years left to run. And if that doesn’t work out, the tower shall be redeveloped as a lodge with a bigger leisure podium that might host digital Disneyland-like rides.
Tenants on the prowl embody Blue Owl Capital (looking for 600,000 sq. ft), Capital One (looking for 850,000 sq. ft), Proskauer Rose (looking for 400,000 sq. ft) and Two Sigma Investments (looking for 350,000 sq. ft).
Insurance firm C.V. Starr has signed a deal to relocate to the tower that will ultimately stand at 343 Madison. Volley Studio
Even Penn 15, Vornado’s long dormant Hotel Pennsylvania website reverse Madison Square Garden, is getting severe lookers.
“At our Penn 15 site, we are now responding to requests for proposals for substantial blocks of space,” CEO Steve Roth said on a November convention call, including, “This is not just kicking the tires. This is serious business.”
Other tenants are buckling down and staying put. And even large tenants are renewing in recognition that they gained’t have many choices until new developments arrive, explained Mary Ann Tighe of CBRE.
Not every lease in settled. In Times Square at 1515 Broadway, SL Green is still in talks with a tenant. Christopher Sadowski
That’s one purpose Bruce Mosler of Cushman & Wakefield said 44 tenants occupying over 100,000 sq. ft renewed their leases — in contrast to just 36 in 2024.
The downside extends to both large and mid-sized tenants that are looking for prime areas, even at high rents. “Every time we submit a proposal and there is competition, it becomes a beauty pageant as to which tenant has the better credit profile,” explained Adam Henick of Current Real Estate Advisors. “It’s the Wild West and you have to dig your heels in to get deals done.”
One of Mosler’s tenants was bumped thrice in its quest for 50,000 sq. ft. Of course, the AI growth is partially accountable for the squeeze. For the last three years, AI pioneers have devoured up big swaths of sq. footage, with AI corporations comprising 59% of all Midtown South leasing.
The destiny of the Roosevelt Hotel is also yet to be determined. It’s still ready for a developer to take it on. Luiz C. Ribeiro for New York Post
Savills is now monitoring 2 million sq. ft of energetic AI necessities for 2026. And while some are apprehensive the AI tenant growth will fizzle out — echoing the dotcom bust of the 2000s — brokers said, for the most half, these new entrants are nicely funded and have high, in-office expectations. “They are driven to high-end, amenitized Class A buildings rather than scrappy side-street properties,” said Zev Holzman of Savills.
New AI instruments are also serving to brokers fill areas in spillover areas. At 875 Sixth, Grant Greenspan of Kaufman is utilizing “social media techniques that didn’t exist before” permitting him to appeal to a youthful viewers.
Over the course of last yr, the market shifted from, “There’s too much space” to, “There’s no space,” noticed Bill Elder of RXR, one of the builders of 175 Park. “There is a continued quest to upgrade the corporate premises because what differentiates you from the competition is your office and your environment and it is really meaningful.”
Quiet room
The top of 1211 Sixth Ave. lists for the first time in 20 years. Optimist Consulting.
Spaces that haven’t been accessible for 20 years along with whisper listings are popping up amid growing demand for places of work.
In Midtown, the new Rolex Building at 665 Fifth Ave. is quietly offering over a dozen flooring at the top of the 28-story tower. Jon Fales of Cushman & Wakefield has the triple-digit whisper itemizing which is being marketed by phrase of mouth.
“They want it to be like a club and have to approve every tenant,” said Eric Reimer of Byrnam Wood whose tenant, Angeles Wealth Management, will transfer there from the Seagram Building this fall.
Under the new possession of RXR, the top of the 45-story 1211 Ave. Sixth Ave. building, where The Post is based, is being supplied for the first time in 20 years. To lure a tenant to the 700,000- to 800,000-square-foot block, RXR is modernizing and enlarging the foyer and elevators and including a slew of perks including a Twenty second-floor tenant-only amenity lounge. The asking rent shall be around $130 per foot, said Bill Elder of RXR.
In Chelsea, Barry Diller’s ice mountain-like IAC Building at 555 W. 18th St., will permit an outdoors firm to rent for the very first time. Steve Rotter of Newmark is advertising the 83,000 sq. ft of beforehand unavailable space that has Hudson River views.
Downtown, the largest 360-plus harbor views may be scored at One World Trade. Lease a duplex workplace on its 89th and ninetieth flooring in time to savor the America250 July Fourth celebrations with two ship parades and fireworks.
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