It marked a milestone in the Midtown office market of National Bank of India and leased nearly 42,000 square feet on the third floor of 425 Park Ave.
This was a victory for Developer L&L Holdings, with financial partners spending more than $1 billion developing the tower on East 55th Street. Commercial Observer First I reported the lease.
More importantly, since construction began six years ago, the tower designed by Norman's foster parents has been closely monitored as a barometer for the high-priced new construction market. Rents at 425 Park exceed $200 per square foot.
“Park Avenue has been on fire for 24 months,” said Stephen B. Siegel, chairman of CBRE Global Mediation, who was not involved in the Indian banking transaction negotiated by Cushman & Wakefield.
“Everything available is lease despite the rising rent,” he said.
However, surges are not limited to Park Avenue. Sources told the Post that the pending lease at 590 Madison Ave. has lost its former anchor tenant IBM to one of SL Green's Madison at East 23rd Street, bringing the 57th Avenue tower back to more than 90% occupancy.
The Ohio Pension Fund, the owner of the building, sells for $1.1 billion. This is a test of the investment sales market that has not yet kept up to the lease boom.
According to new CBRE data, the entire Manhattan office took place over the moon in January and February. The 5.13 million square feet lease, which increased 49% in the same period in 2024, marked the ultimate start of the year, following 2014.
Momentum shows no signs of slowing down. This month, Amazon grew to nearly 200,000 square feet at 237 Park Ave.
Analysts are new to the extent that Manhattan is different from other countries, but the real estate market tells a different story. While some old downtown properties are still in trouble, most of the best midtown buildings, including Hudson Yard and Manhattan West on the Far West Side, thrive due to unprecedented demand and limited supply.
“The market is back,” Siegel said.
“That validates what I'm always saying. Don't give up on the availability of New York City or capital. For businesses, it's clear that they'll grow. There's a demand for premium space and there's not a lot of new products in the pipeline.”
JLL New York area president Peter Rigardi was not involved in the contract for 425 Park, but he showed the same view. “At this point, there's no direct space in the new construction wave in New York City. There's a few sub-leases, but there's more prospects than there's enough space to lease everything.”
As measured by CBRE, the total spaced 252 million square feet of leases in Manhattan in February ran 53% ahead of its monthly average of 1.65 million square feet over five years.
“That validates what I'm always saying: Don't give up on New York City or the availability of capital. Christopher Sadowski
Lease volumes in February rose by double digits in Midtown and Midtown South in the same month of 2024. Even though the downtown market is weak and small, the lease in February was an eye-opening 287% (mainly due to a 500,000-square-foot expansion by Jane Street Capital at 250 Vesey St.).
Unsurprisingly, CBRE has discovered a minimum availability rate of 10.4%, known as the “better building” in the midtown core, consisting of Grand Central and Plaza submarkets, 6th Avenue/Rockefeller Center, Park Avenue and 5th Avenue/Madison Avenue.
Meanwhile, another CBRE study found that the availability of the 6th Avenue/Rock Center Lease in Midtown has been reduced to 13.4%.
“The combination of supply and demand reduction in the most desirable new buildings will benefit Class A and A negative buildings along Sixth Avenue,” Siegel noted.
