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[NYguy]

https://nypost.com/2020/08/11/nyc-of...y-predictions/

NYC office market shows sign of life despite predictions of downfall





By Steve Cuozzo
August 11, 2020

We hate to puncture the doom-and-gloom bubble — it’s such fun to read about the inevitable collapse of the city’s office market — but allow us an upbeat column, full of happy and hopeful tidings all around.

Let’s start with One Vanderbilt, SL Green’s all-but-completed cloudbuster next to Grand Central Terminal. Since the start of the pandemic, the $1.7 billion, 1,401-foot-tall skyscraper where office rents are among the city’s highest has raised its pre-opening tenancy from 65 percent in February to 70 percent, SL Green president Andrew Mathias told us on Monday. Financial firm Oak Hill added to its original commitment and two small private-equity firms signed new leases.

Mathias said the ribbon-cutting is likely to be held on Sept. 14 or 15, by which time SL Green’s newly created public plaza between the tower and the terminal “will be fully operational,” along with $200 million in improved transit and pedestrian amenities which the developer agreed to provide.

Office rents at One Vanderbilt range from $125 to $300 per square foot, according to an investor presentation in December.

The office market shows reassuring signs of life since the grim second quarter, Manhattan’s slowest since 2009. Not including renewals, it was “the worst quarter we have ever recorded,” according to CBRE.

It’s no surprise in the midst of the COVID-19 pandemic and given that “everybody” will soon work from home. Didn’t Mark Zuckerberg himself say that Facebook employees wouldn’t return to their offices until mid-2021?

But there’s a disconnect between short-term, crisis-driven strategies and the longer term. Most CEOs — Zuckerberg included — clearly believe that even this most terrible of crises has a finite duration.

Facebook’s lease for 780,000 square feet last week at Vornado’s Farley Building comes on top of the millions of square feet it already has in Manhattan including at Hudson Yards.

Several other notable large deals have recently been completed. Late in the second quarter, TikTok signed for 230,000 square feet at the Durst Organization’s One Five One (the deal has closed so it’s likely unaffected by a possible TikTok sale).

Since the start of the third quarter, AIG took 325,000 square feet at Rockefeller Group’s 271 Sixth Ave. and 220,000 square feet at Fosun’s 28 Liberty St. Raymond James took 160,000 square feet at Mutual of America’s 320 Park Ave. Meanwhile, we’re told that IBM is hunting more space of up to 100,000 square feet at various locations.

None of this means the commercial market’s fully on the mend. There are going to be more bankruptcies, broken leases and ruined companies. Landlords, brokers and the lawyers and accountants who serve them will be losing sleep for a long time to come.

But it does suggest that end-of-the-world scenarios are wildly overblown — just as all prior predictions of the Big Apple’s demise have been.