NYC Commercial Real Estate Office Leasing Market
If we use the BlackRock headquarters location search as unscientific and anecdotal evidence for which commercial real estate neighborhoods in NYC are ‘hot’ and which are not for office leasing, these are the results…
Whenever BlackRock speaks, the markets quake. When BlackRock picks a location for its headquarters, the city’s office market will tremble. And the de Blasio administration could find itself under an unwelcome spotlight.
Consider this a tale of the city’s three most important office markets.
BlackRock—one of the world’s largest money managers—occupies two buildings just off Park Avenue, once the most prestigious address in midtown. But employers including Citigroup and Major League Baseball have been leaving midtown east because the buildings there are old—66 ½ years, on average—and outmoded for the way large corporations configure their operations.
BlackRock considered and then ruled out anchoring Larry Silverstein’s 2 World Trade Center tower. In January, Fox and News Corp. similarly backed out of an almost-completed deal to move to the building, which offers low rents through large city subsidies.
Now BlackRock is eyeing the far West Side. It could relocate to Hudson Yards, the great legacy of the Bloomberg administration, or to a tower that Tishman Speyer is planning one block north. It would be in good company at either location, as Hudson Yards’ developer, the Related Cos., has lured a list of well-known names: Coach, Milbank Tweed, KKR, SAP and Time Warner, to name a few. They are moving into the most modern office space anywhere, helped by significant tax breaks.
Although BlackRock might stay in midtown, as Fox and News Corp. did, the odds of a move seem good.
Here’s what the BlackRock story tells us about the city’s three major office districts:
- Downtown continues to struggle to lure the high-profile, big-name tenants it needs to fill the new skyscrapers at the World Trade Center site. Whether it can do so remains an open question, especially if the city’s economy weakens.
- The far West Side is established as the go-to location for successful companies that want to make it clear they are the best in their business. Its future seems secure.
- Midtown east is in danger of seeing its tenants slip away unless the de Blasio administration can finally push through a rezoning to allow a handful of new office buildings and modernization of old ones—something the Bloomberg administration failed at three years ago.
Read the rest of the article at Crain’s New York here.
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