At a glance
- For allocators underwriting New York office debt or equity, overflow leases and expanding-tenant leases price differently, because overflow tenants trade up when Class A softens.
- Bill Rudin, Rudin's co-executive chairman, said space at the firm had been "sitting for a significant time" before it signed a 100,000-square-foot lease in the last six months.
- The panelists agreed the best offices are filling and that New York keeps drawing talent, pointing to 350 Park Avenue, Rudin's 1.9 million-square-foot tower with hedge fund Citadel, and to 32 Avenue of the Americas.
Demand spilling over from Class A buildings is now lifting lease-up in Class B and parts of downtown Manhattan, Bruce Mosler, chairman of Cushman & Wakefield's global brokerage, said Wednesday at Commercial Observer's State of Office forum.
"We're in a place that we haven't been for a long time, a very healthy place in New York, and now the spillover from everything that's happening in Class A is affecting the lease-up in Class B, and even parts of downtown," Mosler said at Rudin's 3 Times Square, where he moderated the forum's first panel. He added that rising interest rates and "inflation on the horizon" worked against that picture.
For allocators underwriting New York office debt or equity, overflow leases and expanding-tenant leases price differently, because overflow tenants trade up when Class A softens. The forum put both halves of that demand question on the table: Rudin's recent leasing, and a federal government that says it wants more of its space occupied.
Bill Rudin, Rudin's co-executive chairman, said space at the firm had been "sitting for a significant time" before it signed a 100,000-square-foot lease in the last six months. A 200,000-square-foot lease is out, he said.
The panelists agreed the best offices are filling and that New York keeps drawing talent, pointing to 350 Park Avenue, Rudin's 1.9 million-square-foot tower with hedge fund Citadel, and to 32 Avenue of the Americas. Commercial Observer described the morning as a victory lap for record rents, a booming technology industry and new supply lows, with affordability and rising rates as the sour notes.
Edward Forst, administrator of the U.S. General Services Administration, announced at the forum that Cushman & Wakefield's Mark Weiss will become the agency's public buildings commissioner. Forst also said the push to get the agency's 24 largest agencies to at least 60% occupancy is a legal mandate, and that he doubts they will reach it by year's end. Hundreds of thousands of federal office leases in New York City come up for renewal over the next few years.
The spillover from everything that's happening in Class A is affecting the lease-up in Class B, and even parts of downtown.Bruce Mosler, chairman of Cushman & Wakefield's global brokerage
Reported by the Sectors desk from Commercial Observer. Published . Corrections