The latest US labour market figures, which reported only 29,000 new jobs in September and an increase in the unemployment rate to 4.2 per cent, combined with the 10-year Treasury yield reaching its highest level in 19 years, caused some concern. These macroeconomic indicators could trigger nervousness among borrowers. However, real estate experts should adopt a nuanced perspective, especially with regard to the office market.
According to a study by Colliers, the volume of office space available for rent in Manhattan has reached its lowest level since 2020, and a reversal of this trend is not currently foreseeable. Since July, leases for approximately 10.06 million square feet have been signed in Manhattan. This catapulted the third quarter of this year 19.2 per cent above the 10-year average, although the volume was slightly below the 11.02 million square feet of the second quarter.
Significant Lease Deals in Manhattan
This activity is reflected in numerous prominent lease agreements. Qube, a global investment manager, leased 52,000 square feet at 70 Hudson Yards, a project by Related Companies and Oxford Properties Group. Concurrently, Castle Hook Partners plans to occupy space in the upcoming 625 Madison Avenue. Other notable transactions include the leasing by Bank of India and IQ-EQ Fund Services at 1212 Avenue of the Americas from Stawski Partners, and the signing of a 205,000 square foot lease by Morgan, Lewis & Bockius at 1251 Avenue of the Americas from Mitsui Fudosan America.
Further north on the Avenue of the Americas, investment firms Silvercrest Asset Management and i80 Group each secured space at 1345 Avenue of the Americas from Fisher Brothers. Not only traditionally established locations but also modern landmarks are attracting tenants: Private equity firm Sentinel Capital Partners expanded its presence at SL Green Realty's One Vanderbilt by an additional 7,134 square feet, increasing its total area to 34,737 square feet. Rumour has it that Sony is in negotiations to move into Tishman Speyer's 99 Hudson Boulevard as an anchor tenant.
Strength in Retail and Boom in South Florida
The retail sector is also proving robust. Brixmor Property Group and Everview Partners announced the acquisition of the 63 million square foot Slate Grocery REIT for 2.34 billion US dollars. Toys R Us, following a reorientation, plans to open 120 temporary stores nationwide in partnership with Go! Retail Group before the holidays. For New York nostalgics: Maison Estelle, a British members-only club, will occupy the 30,000 square foot Church of the Holy Communion at 656 Avenue of the Americas, which housed the Limelight nightclub in the 1980s and 90s.
South Florida continues to develop into one of the most dynamic markets. The development team behind Mercedes-Benz Places–Miami received a 1.11 billion US dollar financing package for the 67-storey luxury condo with 791 residential units, led by J.P. Morgan, with 250 million US dollars in C-PACE financing from Nuveen Green Capital. Related Urban Development Group secured 167 million US dollars for the financing of the two-tower, 257-unit Lummus Parc residential project in Miami. Particularly noteworthy is Ken Griffin's acquisition of a 35-acre site in Wynwood from Moishe Mana for 1.1 billion US dollars. This transaction, one of the largest real estate transactions ever, is part of a 2 billion US dollar donation from Griffin for the establishment of a Carnegie Mellon University branch in Miami, underscoring the region's continued growth.
