Come on, C-Note, admission to a new exclusive club in Manhattan's upscale office market is $200 per square foot.
According to the paper, 28 new leases were signed in 2024 with rents above $200 per square foot, a record high.
These transactions represented the top of the top.
Meanwhile, a surprising new report from JLL found that there were also 212 deals that were signed for at least $100 per square foot.
JLL's report highlighted that total lease-year occupancy in Manhattan was 30.2 million square feet, an increase of 19.4% from 2023 and reaching 30 million square feet for the first time since 2018.
“Top of the market'' [$100-and-up] “Leases accounted for almost a third of the total market in 2024,” said Cynthia Wasserberger, JLL team leader and JLL vice chairman, who shared “upper tier deal analysis” with the Post. He was amazed.
“If you look at the $200-plus market, people are no longer blinking at these rents. We've seen them close to 600,000 square feet in 2024,” Wasserberger said.
The larger, $100-plus top-end class in 2024 will occupy an unprecedented 9.8 million square feet of space, as measured by JLL, easily surpassing the record 8.8 million square feet of 2019, which was considered ancient. Updated.
Just 5.6 million square feet of land was valued at more than $100 in 2023.
Although JLL did not name the tenants in the investigation and later declined to do so in response to questions from the Post, market observers said the year ended on a high note with two major closings on New Year's Eve. revealed that.
Expanding from 55 Hudson Yards, Stone Peak and Visa each subleased 150,000 square feet of floor space in Warner Bros. Discovery for rents in excess of $100 per square foot.
“Visa and Stonepeak were hoping to close on 30 Hudson Yards by the end of the year,” one of the people told the Post. “Because they knew that even if they didn't, there was no shortage of people ready and willing to jump in.”
No one from CBRE involved in both transactions could comment due to strict confidentiality agreements.
The gold standard trade comes as the Manhattan market recovers slowly and unevenly from the pandemic.
JLL said “the work-from-home momentum is firmly in the rearview mirror,” but vacancy rates across Manhattan are low, even though vacancy rates are much lower in prime locations like Park and 6th Avenue. The room rate remains at around 18%.
That naturally means that vacancy rates are much higher elsewhere. But owners of luxury real estate are sitting pretty.
According to JLL's research, Park Avenue had 52 of the most expensive contracts and four of the 10 largest contracts by size. The Seagram Building had 12 high-end deals, nine of which were over $200.
Vornado Realty Trust is proud to have completed most of C-Note's transactions, with 19 of them totaling over 1.361 million square feet.
Perhaps the most lucrative deal per square foot was at SL Green's One Vanderbilt, where law firm McDermott Will & Emery paid a staggering 280 psf for a suite on a high floor, sources told the Post. Ta.
Wasserberger declined to confirm or deny the charges.
The revived financial services accounted for 12.2 million square feet, representing nearly 40% of all transactions in 2024, and 64% of the C-note class.
Citing Wall Street's “almost insatiable demand for high-quality office space,” JLL said it “reaffirmed its position in dramatic fashion” after a period of dominance by technology companies.
Also in the $200-plus class were Tikehau Capital and Platinum Equity (9 West 57th St.), according to market sources. Patient Square Capital in the GM Building. Learink Partners and Freestone Grove Partners in the Seagram Building. Lever House Westpac Advisor.
In the just over $100 class, the largest in terms of size appears to be the renewal and future expansion of Blackstone at 345 Park Avenue in Rudin.
JLL again did not reveal the tenant, but topping the list of largest deals was a single 1.056 million square foot deal there. It looks like the 1.06 million square foot deal by Stephen Schwartzman's company that the Commercial Observer reported last summer.
C-Note leases were once more rare, averaging just 110 a year before the pandemic, most of them for “boutique” spaces of less than 10,000 square feet.
JLL's 2024 tally included 35 leases of 50,000 square feet or more and 11 leases of 200,000 square feet or more.
“However, demand for 'trophy' diggers is so strong that supply is limited and declining,” JLL said.
Overall, rents in Manhattan today average between $60 and $90 per square foot for most Class A buildings, and much lower for Class B properties.
“JLL's numbers show how attractive high-end buildings are,” said an official at another securities firm. “That means either brand-new hotels like One Vanderbilt or The Spiral, or older hotels like Lever House, which either have great views or are landmarks that can be upgraded for big bucks.”
