Lee & Associates 2Q2016 Manhattan Office Report

LEE NYCMANHATTAN TREND TRACKER2Q2016

THE OFFICE MARKET REPORT

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MIDTOWN WESTMIDTOWN WEST

MIDTOWN EASTMIDTOWN EAST

GRAND CENTRALGRAND CENTRAL

TIMES SQUARETIMES SQUARE

CITY HALL| INSURANCE DISTRICT

CITY HALL| INSURANCE DISTRICT

WORLDTRADECENTER

WORLDTRADECENTER

FINANCIALDISTRICT

FINANCIALDISTRICT

ROCKEFELLERCENTER

ROCKEFELLERCENTER

PENN STATION | GARMENT DISTRICTPENN STATION | GARMENT DISTRICT

CHELSEACHELSEA

MURRAY HILLMURRAY HILL

GRAMERCY | FLATIRONGRAMERCY | FLATIRON

SOHO | NOHOSOHO | NOHO

HUDSON SQ.| TRIBECA

HUDSON SQ.| TRIBECA

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MANHATTAN TREND TRACKER 2ND QUARTER 20162

SUBMARKETS

MIDTOWN

MIDTOWN SOUTH

DOWNTOWN

LEE & ASSOCIATES NYC

MARKET SUMMARY LEE NYCMANHATTAN TREND TRACKER2Q2016

MarketInventory

(MSF)(Rnd.)

AvailableTotal(SF)

TotalVacancy

Rate(%)

TotalAvailability

Rate(%)

TotalNet

Absorption(SF)

UnderConstruction

(SF)

DirectAskingRent

($PSF)

Sublease AskingRent

($PSF)

Overall AskingRent

($PSF)Midtown 222 25,608,398 8.3% 11.5% 23,498 870,639 $85.44 $66.26 $82.58

Grand Central 71 9,396,050 9.5% 13.2% 139,878 - $76.26 $56.70 $74.61 Midtown East 25 1,892,039 4.0% 7.4% (41,941) - $73.54 $62.69 $72.11 Midtown West 20 1,510,509 4.5% 7.4% 73,751 94,211 $75.44 $45.93 $74.24 Plaza District 39 6,099,384 10.2% 15.6% (135,794) 776,428 $113.07 $75.62 $108.74 Rockefeller Plaza 28 2,560,484 6.9% 9.1% (122,267) - $85.62 $49.46 $79.40 Times Square 38 4,149,932 10.0% 10.9% 109,871 - $82.75 $71.41 $78.84

Midtown South 152 13,777,049 6.5% 9.1% 1,297,004 6,210,350 $69.83 $58.40 $67.33 Chelsea 18 1,216,125 5.4% 6.7% (67,453) 272,640 $60.60 $52.72 $58.87 Gramercy | Flatiron 30 2,040,487 5.1% 6.7% 169,583 - $75.45 $62.95 $72.90 Hudson Square | Tribeca 23 2,861,646 10.5% 12.2% 1,278,305 120,413 $71.72 $60.53 $70.13 Murray Hill 13 1,316,271 7.4% 10.3% (144,882) - $70.09 $53.36 $66.04 Penn Station-Garment 54 5,464,197 6.2% 10.1% 145,943 5,736,297 $67.73 $56.29 $64.86 SoHo | NoHo 13 878,323 4.7% 7.0% (84,492) 81,000 $71.50 $67.45 $68.93

Downtown 106 12,047,646 8.8% 11.4% 844,397 2,861,402 $62.98 $51.45 $61.10 City Hall | Insurance Dist. 27 1,380,414 4.5% 5.1% 11,304 - $52.29 $42.65 $51.24 Financial District 44 6,110,200 9.3% 13.9% 243,769 - $58.16 $50.54 $56.00 World Trade Center 34 4,557,032 11.7% 13.2% 589,324 2,861,402 $67.54 $55.86 $66.89

Manhattan 480 51,433,093 7.8% 10.7% 2,164,899 9,942,391 $75.23 $61.18 $72.78

2016 | 2Q Manhattan Office

Commenced with report, 1Q 2015, Lee & Associates utilizes new metric methods from its prior reporting methods. Lee & Associates Office Metrics are based on office buildings with a minimum rentable building area of 100,000 square feet, with the exception in the submarket of Soho/Noho, which uses metrics based on office buildings with a minimum rentable building area of 50,000 square feet. Lee & Associates Office Metrics comprise data representing existing office buildings for Classes A, B and C. Since new metric methods have been applied, the correlation of data for this report (and all reports since 1Q 2015) will have no bearing over the reports previously published by Lee & Associates (prior to 1Q 2015).

1. Under Construction only includes buildings with expected deliveries, with a primary office use and over 50,000 square feet. Buildings under construction that include office as a secondary or tertiary use are excluded. All proposed new construction buildings were excluded.2. All rent figures are based on market and submarket weighted averages. Overall Asking Rents take Direct and Sublease rents into account.

Lee & Associates NYC accepts no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should beplaced on the information contained in this document.

MarketInventory

(MSF)(Rnd.)

AvailableTotal(SF)

TotalVacancy

Rate(%)

TotalAvailability

Rate(%)

TotalNet

Absorption(SF)

UnderConstruction

(SF)

DirectAskingRent

($PSF)

Sublease AskingRent

($PSF)

Overall AskingRent

($PSF)Midtown 222 25,608,398 8.3% 11.5% 23,498 870,639 $85.44 $66.26 $82.58

Grand Central 71 9,396,050 9.5% 13.2% 139,878 - $76.26 $56.70 $74.61 Midtown East 25 1,892,039 4.0% 7.4% (41,941) - $73.54 $62.69 $72.11 Midtown West 20 1,510,509 4.5% 7.4% 73,751 94,211 $75.44 $45.93 $74.24 Plaza District 39 6,099,384 10.2% 15.6% (135,794) 776,428 $113.07 $75.62 $108.74 Rockefeller Plaza 28 2,560,484 6.9% 9.1% (122,267) - $85.62 $49.46 $79.40 Times Square 38 4,149,932 10.0% 10.9% 109,871 - $82.75 $71.41 $78.84

Midtown South 152 13,777,049 6.5% 9.1% 1,297,004 6,210,350 $69.83 $58.40 $67.33 Chelsea 18 1,216,125 5.4% 6.7% (67,453) 272,640 $60.60 $52.72 $58.87 Gramercy | Flatiron 30 2,040,487 5.1% 6.7% 169,583 - $75.45 $62.95 $72.90 Hudson Square | Tribeca 23 2,861,646 10.5% 12.2% 1,278,305 120,413 $71.72 $60.53 $70.13 Murray Hill 13 1,316,271 7.4% 10.3% (144,882) - $70.09 $53.36 $66.04 Penn Station-Garment 54 5,464,197 6.2% 10.1% 145,943 5,736,297 $67.73 $56.29 $64.86 SoHo | NoHo 13 878,323 4.7% 7.0% (84,492) 81,000 $71.50 $67.45 $68.93

Downtown 106 12,047,646 8.8% 11.4% 844,397 2,861,402 $62.98 $51.45 $61.10 City Hall | Insurance Dist. 27 1,380,414 4.5% 5.1% 11,304 - $52.29 $42.65 $51.24 Financial District 44 6,110,200 9.3% 13.9% 243,769 - $58.16 $50.54 $56.00 World Trade Center 34 4,557,032 11.7% 13.2% 589,324 2,861,402 $67.54 $55.86 $66.89

Manhattan 480 51,433,093 7.8% 10.7% 2,164,899 9,942,391 $75.23 $61.18 $72.78

2016 | 2Q Manhattan Office

Commenced with report, 1Q 2015, Lee & Associates utilizes new metric methods from its prior reporting methods. Lee & Associates Office Metrics are based on office buildings with a minimum rentable building area of 100,000 square feet, with the exception in the submarket of Soho/Noho, which uses metrics based on office buildings with a minimum rentable building area of 50,000 square feet. Lee & Associates Office Metrics comprise data representing existing office buildings for Classes A, B and C. Since new metric methods have been applied, the correlation of data for this report (and all reports since 1Q 2015) will have no bearing over the reports previously published by Lee & Associates (prior to 1Q 2015).

1. Under Construction only includes buildings with expected deliveries, with a primary office use and over 50,000 square feet. Buildings under construction that include office as a secondary or tertiary use are excluded. All proposed new construction buildings were excluded.2. All rent figures are based on market and submarket weighted averages. Overall Asking Rents take Direct and Sublease rents into account.

Lee & Associates NYC accepts no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should beplaced on the information contained in this document.

MANHATTAN TREND TRACKER 2ND QUARTER 20163 LEE & ASSOCIATES NYC

Availability in Midtown climbed steadily by 20 basis points to 11.5% in Q2, while leasing activity was up 86.88%. This

resulted in one of the highest quarter changes the market has ever experienced. Direct asking rents increased by $0.91 to $85.44. Availability and vacancy in the sublease sector were below 2%, resulting in a 5.4% asking rent increase to $66.26. Nearly 3 million square feet was leased, resulting in positive net absorption. Although the overall availability is higher than Midtown South (9.1%) and Downtown (11.4%), the market’s performance is continuing to strengthen incrementally and commanding an asking rent premium of 13.6% above the overall Manhattan average of $75.23 per-square-foot.

Grand Central quickly rebounded from Q1 and outperformed expectations. Since last quarter, leasing activity jumped 140% and the submarket turned over a positive net absorption of close to 140,000 square feet. Availability was down 140 basis points and direct asking rents increased to $76.26 from $75.35. Notable Deals: NYU Langone Medical Center leased 376,765 square feet on the 2nd to 25th floors at 222 East 41st Street. Three significant renewals occurred, with D.E. Shaw & Co. extending its lease at 1166 Avenue of the Americas with 195,375 square feet; Alston & Bird, LLP renewing at 90 Park Avenue with 122,525 square feet; and New York Life renewing and expanding at 420 Lexington Avenue in a deal totaling 114,709 square feet.

Despite a 10 basis point rise in vacancy, Midtown East continued to have the lowest vacancy in Manhattan at 4%. Availability was up 30 basis points, with leasing activity still below 500,000 square feet. This resulted in a consecutive quarter of negative net absorption. Nevertheless, direct asking rents were up $0.63 to $73.54 from last quarter and up $2.79 from one year ago. Notable Deals: Handler Real Estate renewed its space at 885 Second Avenue, in a 10-year deal for 16,835 square feet on the 47th floor. In addition, Dag Hammarskjold Plaza (885 Second Avenue) leased 46,194 square feet to the Memorial Hospital for Cancer & Allied Diseases.

Midtown West direct asking rents decreased in Q2 by $1.14 to $75.44, despite a 10 basis point drop in availability and a 40 basis point drop in vacancy. However, overall asking rents were up $1.56 to $74.24. The push in overall rents is a result of sublease rents increasing $1.40 to $45.93; which in turn may be a result of the sublease sector’s low vacancy of 0.4%. For the past three quarters,

the submarket has been averaging 217,875 square feet of leasing activity (well below its high average of 436,839 square feet in 2014). Notable Deals: Greystone Funding Corp. renewed its lease at Carnegie Hall Tower (152 West 57th Street), with 39,571 square feet across multiple floors.

Direct asking rents in the Plaza District dipped $1.82 to $113.07, resulting in lower asking rents than one year ago when they were at $113.81. Vacancy in the submarket is now at 10.2%, a 30.8% increase from last quarter. Overall availability (comprised primarily of Class A office space) increased 440 basis points as leasing activity (just below 670,000 square feet) still resulted in a negative net absorption. Notable Deals: Wiggin and Dana LLP relocated and signed a 15-year deal for 16,000 square feet at 437 Madison Avenue. Deutsche Asset Management acquired 405 Park Avenue for $237.76 million, or approximately $1,455 per-square-foot. Olayan America acquired the nearly vacant Sony Building (550 Madison Avenue) for $1.4 billion with plans to continue operating the property as an office building.

Rockefeller Plaza direct asking rents were up $3.20 to $85.62 from last quarter and increased approximately 4% from a year ago. Vacancy was up 30 basis points with availability increasing 50 basis points, resulting in a consecutive quarter of negative net absorption of 122,267 square feet. Nevertheless, leasing activity compared to last quarter increased nearly 400%, surpassing 1,000,000 square feet leased. Notable Deals: Playbill signed a new lease for 10 years at 729 Seventh Avenue for 11,200 square feet, taking the entire 4th floor. RXR completed its $1.7 billion acquisition of the UBS Tower at 1285 Avenue of the Americas, and renewed the namesake tenant, UBS, to a long-term 17-year deal.

After underperforming for all of 2015, Times Square improved for the second consecutive quarter. Direct asking rents increased $3.56 to $82.75 and the submarket now has the third highest asking rents in Manhattan. Availability decreased 120 basis points from last quarter and 330 basis points from last year. Notable Deals: Vedder Price, a Chicago-based law firm, signed a new lease at 1633 Broadway for 52,555 square feet. The law firm currently is a tenant at the Paramount Group-owned building and will relocate to the entire 31st floor. Bleacher Report also signed a lease in the building for 58,656 square feet on the 2nd and 3rd floors.


MIDTOWN


MIDTOWNMIDTOWN LEE NYCMANHATTAN TREND TRACKER2Q2016

7.5%

11.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Midtown Vacancy and Availability

Vacancy Availability 10Y Vacancy Avg. 10Y Availability Avg.

4,286,849

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Midtown Leasing Activity

SF Leased 10Y Avg.

(2,500,000)(2,000,000)(1,500,000)(1,000,000)

(500,000)0

500,0001,000,0001,500,0002,000,0002,500,0003,000,000

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Midtown Net Absorption


MIDTOWN SOUTH

Overall availability in Midtown South for Q2 was 9.1%, a gradual decrease of 20 basis points from last quarter’s activity.

Vacancy was up 50 basis points from last year. The market’s overall asking rents were only up $2.46 year-over-year to $67.33. Leasing activity remained below 3,000,000 square feet in Q2, as it was in Q1. Activity has averaged more than 3,000,000 square feet per quarter from 2013-2015.

Compared to last year, Chelsea’s vacancy increased 200 basis points and 90 basis points in availability. In the same time span, direct asking rents increased $3.12 to $60.60. Although leasing activity increased 90% over the last quarter, the submarket has had a consecutive quarter of negative net absorption. As we forecast last quarter, the submarket’s outlook will underperform due to rising rents – and we believe this trend may continue into Q3. Notable Deals: Nielsen Company leased 43,529 square feet at 675 Avenue of the Americas for 15 years, with an asking rent in the high $60s. Level 3 Communications renewed at 85 Tenth Avenue, occupying 59,900 square feet.

Last quarter we forecast that Gramercy and Flatiron would shed some of their excess available inventory. As expected, availability was down 50 basis points ending the quarter. Direct asking rents continued to hover in the mid-70s at $75.45. Sublease asking rents increased $3.40 to $62.95, with a sublet market vacancy of 0.6%, accounting for approximately 15% of leasing activity. The number of tracked leasing transactions (59) was the lowest it’s been since 3Q 2012. However, leasing activity has been gradually increasing since 1Q 2015; an indication that larger office transactions are getting done. Notable Deals: Verve Wireless Inc. signed a lease at the Knickerbocker Building (79 Fifth Avenue), taking 21,500 square feet for 10 years. Credit Suisse renewed its lease at 11 Madison Avenue, maintaining its 186,396 square-foot footprint. Simons Foundation took almost all of 162 Fifth Avenue, with 137,737 square feet.

After experiencing the largest negative net absorption (220,294 square feet) last quarter, Hudson Square and Tribeca rebounded and net absorbed a positive 1,278,305 square feet, fueled by a 215% increase in leasing activity. This activity allowed Midtown South to swing to positive absorption. Direct asking rents decreased by $2.12 to $71.72, while vacancy increased by 120 basis points and availability decreased by 100 basis points. With additional price reductions, we forecast that availability will continue to decrease in 3Q 2016. Notable Deals: Verizon renewed its lease for 63,643

square feet at 532-550 Washington Street. Galvanize Inc. leased 54,590 square feet at 315 Hudson Street, where the asking rent was in the mid-$70s. Ownership, Jack Resnick & Sons, commenced a $65 million capital improvement program. SY Partners took 45,308 square feet at 395 Hudson Street.

The stagnant submarket of Murray Hill continued to experience negative net absorption for the third consecutive quarter. In Q2, we forecast that if direct asking rents didn’t decrease, vacancy and availability would increase. Accordingly, vacancy has increased by a full percentage point to 7.4% and availability increased by 20 basis points. Despite this, direct asking rents increased by $0.98 to $70.09. Since last quarter, subleasing activity increased by 162%, accounting for 42% of Murray Hill’s leasing activity. Sublet rents have increased 8.1% to $53.36. Notable Deals: The Trade Desk took 49,694 square feet at 2 Park Avenue’s 5th floor, where the asking rent was in the low-$60s. In addition, the Gilt Groupe renewed its lease for 48,944 square feet on the 4th floor at 2 Park Avenue.

The Penn Station and Garment District submarket turned over a positive net absorption, resulting in a vacancy and availability rate decrease of 30 basis points each to finish the quarter at 6.2% and 10.1%, respectively. Rents overall remained stable, increasing by only $0.47 to $64.86. If they continue at this pace, we forecast Q3 to mirror this quarter’s performance. Notable Deals: Schroder Investment Management North America signed a 15-year lease at 7 Bryant Park for 73,796 square feet. Investment information provider Third Bridge signed at 1411 Broadway for 25,261 square feet for a 7-year lease. Also, Schoology, Inc. subleased 38,656 square feet at Two Penn Plaza.

Last quarter saw a push-back and resistance to asking rents in SoHo and NoHo, which created an influx of space that resulted in a 145% growth of sublet space. Since then, sublease leasing activity increased 32%, comprising 21% of all leasing activity compared to just 16% last quarter and 1% in Q4 2015. Overall, the submarket’s sublet leasing since Q4 2015 has increased 173%. Year-over- year sublease asking rents have gone up close to 17% to $67.45. In spite of that, direct rents did rebound by $1.12 to $71.50, since their drop last quarter by $2.20. Notable Deals: New York University renewed 81,737 square feet on multiple floors at Astor Place Center (2-20 Astor Place). Two Sigma leased 25,502 square feet at 100 Avenue of the Americas, where the asking rent was reported in the mid-$80s.



MIDTOWN SOUTH LEE NYCMANHATTAN TREND TRACKER2Q2016

6.3%

9.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Midtown South Vacancy and Availability


3,029,998

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Midtown South Leasing Activity

SF Leased 10Y Avg.

(1,500,000)

(1,000,000)

(500,000)

0

500,000

1,000,000

1,500,000

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Midtown South Net Absorption

Net Absorption


DOWNTOWN

Not since 2012 has Downtown had a vacancy rate of 8.8%.

Since the delivery of One World Trade Center caused the

vacancy and availability rates to spike, vacancy has decreased

an average of 68 basis points in each quarter. The change from

last quarter was a reduction by a full percentage point from 9.8%

to 8.8%. Due to the Financial District available stock of inventory,

Downtown’s availability climbed 30 basis points to 11.4%. Direct

asking rents decreased by $0.26 to $62.98.

City Hall and Insurance District direct asking rents have

increased for the previous five quarters. In Q2, however, the

average asking rent decreased by $0.31 to $52.29. The submarket

remained stable, maintaining the same vacancy rate of 4.5% and

an availability rate of 5.1%. Despite this sudden halt in increasing

rents, we are forecasting direct asking rents to increase in 3Q

2016, providing the amount of inventory continues to remain low.

However, it’s important to note that the quarterly average number

of deals completed has been decreasing since 2013 (an average

of 48 in 2013; 35 in 2014; 33 in 2015; and 32 thus far in 2016).

Notable Deals: The New York City Department of Citywide

Administration leased 182,750 square feet at 375 Pearl Street,

where the reported asking rent was in the low-$50s. Lovell Safety

Management renewed its lease for 25,398 square feet at 110

William Street on a 10-year lease. Altuzarra leased approximately

12,000 square feet at the Woolworth Building (233 Broadway),

where the asking rent was reported to be in the high-$50s.

Since we implemented our new office metrics back in 1Q 2015,

Financial District direct asking rents have escalated. The growth

has been steady and gradual, with a quarterly average change of

$0.73. Quarter-over-quarter direct rents increased $0.89 to $58.16.

In the same time span, vacancy decreased 28% (from 12.9% to

9.3%). Outside of Midtown’s Grand Central and Plaza District

submarkets, the Financial District had the third highest available

supply (over 6 million square feet). Availability decreased 20 basis

points year-over-year, primarily due to this quarter’s increase

of close to 700,000 square feet of additional space. Availability

increased 130 basis points over last quarter. Notable Deals:

Insurance provider AmWINS Group renewed at the Wall Street

Plaza (88 Pine Street) for 21,760 square feet. After a three-year

search for new space, Chicago-based law firm Clausen Miller

renewed its lease at 28 Liberty Street for 21,039 square feet. NYU

School of Law’s Brennan Center of Justice signed a 15-year lease

with Silverstein’s 120 Broadway and will occupy 24,476 square

feet. Sullivan & Cromwell LLP acquired two office condominiums

at 125 Broad Street from Mack-Cali Realty Corp. The sale deal

valued the two units totaling 525,000 square feet at $202 million, or

approximately $385 per-square-foot.

We forecasted in Q1 that vacancy and availability in the World

Trade Center and World Financial Center submarket would

continue to shrink going into Q2. Since last quarter, vacancy was

down 190 basis points and availability down 80 basis points. Direct

asking rents decreased $0.85 to $67.54, despite the positive net

absorption increasing by an astonishing 542%. Leasing activity

remained stable from last quarter (averaging 342,394 square feet

this year), although leasing activity reduced by 59% compared to

4Q 2015. Notable Deals: Ameriprise Financial signed a lease for

37,704 square feet at One World Trade Center, bringing the iconic

skyscraper to 69% leased. At Four World Trade Center, Hudson

River Trading signed a 10-year lease for 68,673 square feet, with

the asking rent reported to be in the mid-$80s. The Port Authority

of New York & New Jersey renewed its space of 41,516 square feet

at 2 Trinity Centre (115 Broadway).



DOWNTOWN LEE NYCMANHATTAN TREND TRACKER2Q2016

9.0%

12.2%

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Downtown Vacancy and Availability


1,574,196

- 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Downtown Leasing Activity

SF Leased 10Y Avg.

(3,000,000)

(2,000,000)

(1,000,000)

0

1,000,000

2,000,000

3,000,000

4,000,000

3Q2006

1Q2007

3Q2007

1Q2008

3Q2008

1Q2009

3Q2009

1Q2010

3Q2010

1Q2011

3Q2011

1Q2012

3Q2012

1Q2013

3Q2013

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

Downtown Net Absorption


CONSTRUCTION ACTIVITY


Under ConstructionDeveloper Square Feet Class Est. Delivery

Silverstein Properties 2,861,402 A 2018

Related Companies 2,600,000 A 2019

Brookfield Properties 2,088,941 A 2019

Moinian Group 1,869,500 A 2019


GreenOak Real Estate 670,000 A 2018Durst Organization 221,720 A 2016LM Legacy Group 144,273 A 2017

Savanna 128,367 A 2016CIM Group 106,428 A 2017

Romanoff Equities 95,608 A 2016

Durst Organization 94,211 A 2016

Larry Kuo 72,000 B 2017

Major RenovationsOwner Square Feet Class Completion

Clarion Partners 858,710 A 2017RXR Realty 623,000 A 2016

Pershing Square Capital 423,392 B 2017Highgate Holdings 113,004 A 2016

Kaufman Organization 83,196 B 2016Edison Properties 66,797 B 2016

Pre-Construction PhaseSponsor Square Feet Class

Tishman Speyer 2,850,000 A

Silverstein Properties 2,800,000 ARelated Companies 2,300,000 A

Brookfield Properties 1,976,602 A

SL Green Realty Corp. 1,732,955 ARuben Companies 1,450,000 A

RXR Realty 263,835 A

Albanese Organization 174,222 A

Aurora Capital Associates 167,170 A

Yeung Real Estate Dev. 93,000 AJoy Construction Corp. 90,505 B

Savanna 90,000 AFisher Brothers Management 75,170 B

Liberty Theaters Inc. 73,323 B

Only Properties with over 50,000 Square Feet are listed.

44 Union Square East Gramercy | Flatiron

412-414 West 15th Street Chelsea

425 West 14th Street Chelsea

104-106 West 56th Street Midtown West

75 Rockefeller Plaza Rockefeller Plaza

300 Lafayette Street SoHo | NoHo

Office Property Submarket390 Madison Avenue Grand Central

425 Park Avenue Plaza District

315 East 46th Street Midtown East

45 West 27th Street Gramercy | Flatiron

2 World Trade Center World Trade Center50 Hudson Yards Penn Station-Garment

Office Property Submarket

400 West 33rd Street(Two Manhattan West)

(South Tower)Penn Station-Garment

Office Property Submarket3 World Trade Center World Trade Center

30 Hudson Yards(500 West 33rd Street)

Penn Station-Garment

400 West 33rd Street(One Manhattan West)

(North Tower)Penn Station-Garment

3 Hudson Boulevard(555 West 34th Street)



155 West 23rd Street Chelsea


600 West 58th Street(Frank 57 West)

Midtown West

787 Eleventh Avenue Midtown West

55 Hudson Yards(550 West 34th Street)


512 West 22nd Street Chelsea

61 Ninth Avenue(Prince Tower)

Chelsea

57 Eleventh Avenue(Pier 57)

Chelsea

855 Ave. of the Americas Penn Station-Garment

860 Washington Street Hudson Square | Tribeca

One Vanderbilt Avenue Grand Central

330 East 62nd Street Midtown East

435 Tenth Avenue(66 Hudson Boulevard)


2 Pike Street SoHo | NoHo

20 Times Square Rockefeller Plaza











Larry Kuo 72,000 B 2017










































Midtown West






Chelsea


Chelsea



















Larry Kuo 72,000 B 2017










































Midtown West






Chelsea


Chelsea











Office Property Submarket Class SF Buyer Seller Price $PSF388-390 Greenwich Street

(Citigroup HQ)Tribeca A 2,634,670 Citigroup SL Green Realty $1,883,956,557 $715

1 Water Street(One New York Plaza)

(49% Interest Sale)Financial Dist. A 2,545,000 China Investment Corp. Brookfield Property Partners $1,428,571,429 $561

1211 Avenue of the Americas(News Corp Building)(49% Interest Sale)

Rockefeller A 1,937,895Callahan Capital Partners

Ivanhoe CambridgeBeacon Capital Partners $1,750,000,000 $903

1285 Avenue of the Americas(UBS-PaineWebber Building)

Rockefeller A 1,749,000RXR Realty

China Life InsuranceAXA

JPMorgan Chase$1,649,800,000 $943

550 Madison Avenue(Sony Building)

Plaza District A 852,830Olayan Group

ChelsfieldChetrit GroupClipper Equity

$1,416,666,667 $1,661

345 Hudson Street(Portfolio Allocation)

(Leasehold)(Partial Interest Sale)

Hudson Square B 984,432 Hines Trinity Real Estate $900,605,403 $915

75 Varick Street(One Hudson Square)(Portfolio Allocation)


Hudson Square B 1,200,000 Hines Trinity Real Estate $671,449,633 $560

1250 Broadway Penn Station A 702,763 Global HoldingsJamestown

MHP Real Estate Services$565,000,000 $804

7 West 34th Street(47% Interest Sale)

Penn Station A 477,000CBRE Global Investors

Korea PostVornado Realty Trust $561,000,000 $1,176

24 State Street(1 Battery Park Plaza)

Financial Dist. A 885,645 Allianz Real Estate of America Rudin Organization $365,000,000 $412

330 Hudson Street(6 Hudson Square)

(Leasehold)(50.67% Interest Sale)

Hudson Square A 466,000Ivanhoe Cambridge

Callahan Capital PartnersBeacon Capital Partners $332,000,000 $712



Hudson Square C 401,000 Hines Trinity Real Estate $224,376,086 $560




100 Avenue of the Americas(Portfolio Allocation)


SoHo | NoHo B 381,461 Hines Trinity Real Estate $213,443,207 $560

125 Broad Street(Condominium)

Financial Dist. A 524,500 Sullivan & Cromwell Mack-Cali $202,000,000 $385

30 Broad Street(Leasehold)

Financial Dist. B 427,088 Tribeca Associates Gotham Realty $130,000,000 $304

Properties are sorted by highest priced sale.Selective bulk portfolio sales, leaseholds and condominium units are excluded.

NOTABLE INVESTMENT SALES


Office Property Submarket Class SF Buyer Seller Price $PSF388-390 Greenwich Street

(Citigroup HQ)Tribeca A 2,634,670 Citigroup SL Green Realty $1,883,956,557 $715

1 Water Street(One New York Plaza)

(49% Interest Sale)Financial Dist. A 2,545,000 China Investment Corp. Brookfield Property Partners $1,428,571,429 $561

1211 Avenue of the Americas(News Corp Building)(49% Interest Sale)

Rockefeller A 1,937,895Callahan Capital Partners

Ivanhoe CambridgeBeacon Capital Partners $1,750,000,000 $903

1285 Avenue of the Americas(UBS-PaineWebber Building)

Rockefeller A 1,749,000RXR Realty

China Life InsuranceAXA

JPMorgan Chase$1,649,800,000 $943

550 Madison Avenue(Sony Building)

Plaza District A 852,830Olayan Group

ChelsfieldChetrit GroupClipper Equity

$1,416,666,667 $1,661




75 Varick Street(One Hudson Square)(Portfolio Allocation)


Hudson Square B 1,200,000 Hines Trinity Real Estate $671,449,633 $560

1250 Broadway Penn Station A 702,763 Global HoldingsJamestown

MHP Real Estate Services$565,000,000 $804

7 West 34th Street(47% Interest Sale)

Penn Station A 477,000CBRE Global Investors

Korea PostVornado Realty Trust $561,000,000 $1,176

24 State Street(1 Battery Park Plaza)

Financial Dist. A 885,645 Allianz Real Estate of America Rudin Organization $365,000,000 $412

330 Hudson Street(6 Hudson Square)

(Leasehold)(50.67% Interest Sale)

Hudson Square A 466,000Ivanhoe Cambridge

Callahan Capital PartnersBeacon Capital Partners $332,000,000 $712



Hudson Square C 401,000 Hines Trinity Real Estate $224,376,086 $560




100 Avenue of the Americas(Portfolio Allocation)


SoHo | NoHo B 381,461 Hines Trinity Real Estate $213,443,207 $560

125 Broad Street(Condominium)

Financial Dist. A 524,500 Sullivan & Cromwell Mack-Cali $202,000,000 $385

30 Broad Street(Leasehold)

Financial Dist. B 427,088 Tribeca Associates Gotham Realty $130,000,000 $304

Properties are sorted by highest priced sale.Selective bulk portfolio sales, leaseholds and condominium units are excluded.


Lee & Associates NYC600 Madison Avenue, Third Floor

New York, NY 10022 | 212.776.1200www.leeassociatesnyc.com

James WachtPresident

[email protected]

Peter BrausManaging Principal

[email protected]

Henry AbramovResearch Director

[email protected]

Carly FarkasResearch Associate

[email protected]

With offices

across the nation, the

Lee & Associates® group

of independently owned

and operated companies

is the largest provider of

regional commercial real estate

services in the United States and

the fourth-largest full-service

commercial real estate

organization overall.

Lee & Associates 2Q2016 Manhattan Office Report

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Transcript of Lee & Associates 2Q2016 Manhattan Office Report