[NYguy]

https://www.thecity.nyc/economy/2023...it-remote-work

By Greg David
May 10, 2023

….. The one bright spot is that demand remains strong for the city’s newest and most expensive office towers. A record number of $100-per-square-foot or higher leases were signed in the first quarter — the average Manhattan office lease is $77 a square foot — as well as a few at more than $200 a square foot.

….. The brightest spot is the most modern office buildings, known as “Class A.” Since the beginning of 2002, almost three-quarters of all new leases are in those buildings, according to research from CBRE.

They are seeking exceptionally high rents. Buildings are offering 15 million square feet at more than $100 a square foot.

Demand remains high. Rechler is part of a consortium building a new 100-story building called 175 Park on the site of the former Trump Hyatt which will contain 2.5 million square feet of office space and a 200-room hotel. Around the corner from SL Green’s One Vanderbilt, another top-end new tower, it is expected to open in 2030.

“Since we opened a market suite at One Vanderbilt we have had tenants with leases expiring for 14 million square feet come to see our plans,” he said. “They want to be in the best buildings, close to public transportation, most efficient floor plates, and air and amenities.”

These new buildings, which include the new J.P. Morgan headquarters on Park Avenue, SL Green’s multi-billion-dollar 1 Madison opposite Madison Square Park, and 2 Manhattan West on the Far West Side, will push up the vacancy rate further. Since they are asking high rents, they push up the overall asking rent, even though the rent for older buildings is tumbling.

After those buildings open, there will be a pause since many high-profile projects — such as Vornado’s plan for office towers around Penn Station — have been put on the back burner indefinitely.