Uber Technologies Inc.
and Dotdash turned downtown Manhattan into a new base last year, helping the lease of electric offices in the neighborhood reach a maximum of two decades.
Technology, advertising, media and information, or TAMI companies, contributed greatly to the increase in rents in the center. They offered the last sign of the rebirth of lower Manhattan since the terrorist attacks of 2001. Last year, the neighborhood reached a milestone when the number of jobs exceeded levels at the time of the attacks.
The new construction of the city center, less expensive rents, large office spaces and new transportation centers attracted companies that signed 7.3 million square feet of new office leases in 2019, said Richard Persichetti, vice president of
Cushman and Wakefield’S
Triestatal region research. That was the largest figure since the dotcom boom of the late 1990s, he said.
The neighborhood is not cheap. In 2019, Manhattan’s lowest average initial rent for new leases increased 13% to $ 62.96 per square foot. But that was still cheaper than rents in the Midtown and Midtown South neighborhoods, where the initial rents were $ 87.78 per square foot and $ 92.32 per square foot respectively, according to Cushman, a real estate services company.
“Since Midtown South solidified as the most expensive office market in the United States, that makes the center much more attractive,” said Persichetti.
Overall, Manhattan office owners had a solid 2019, signing and renewing 48.9 million square feet of leases, almost 16% above the total in 2018, according to the real estate services firm
Newmark Group Inc.
TAMI companies were responsible for almost a third of that lease, with large agreements for
com in the far West Side contributing to the increase, Newmark said.
Newmark described the barrage of companies heading to lower Manhattan as the “Condé Nast effect,” and noted that the media company served as a catalyst with its 1.1 million square foot agreement at One World Trade Center in 2011. In the nine Years prior to 2011, 18 tenants in the technology, advertising and media sectors signed agreements to occupy office spaces of more than 50,000 square feet, Newmark said. After the 2011 agreement of Condé Nast there have been 51 TAMI leases.
“It’s the first cannonball in the pool, the first person to make that splash,” said Andrew Peretz, executive director of Newmark. “Suddenly, when the first person does it, everyone else enters.”
The financial, insurance and real estate sectors, historically among the largest tenants in lower Manhattan, accounted for more than two-thirds of the tenants who left the market since early 2011. An exception:
made a renovation and expansion agreement of 1.3 million square feet at One New York Plaza.
Write to Keiko Morris at [email protected]
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