In an unprecedented show of strength, the city’s burgeoning tech firms helped pace an 8.4% rise in the total square footage leased in the 50 largest commercial office deals last year, to 14 million square feet. Tech firms, led by commercial officeAmazon, BuzzFeed and Twitter (at 7 W. 34th St., 225 Park Ave. South, and 245-249 W. 17th St., respectively), accounted for seven of the top 50. Among them, they inked deals for 1.3 million square feet of space, according to CoStar’s annual ranking of those transactions, published in Monday’s edition of Crain’s.
More broadly, the technology, advertising and media firms accounted for 16 of the top 50, and 32% of the total space leased. On the flip side, leasing by the financial firms that traditionally drive the Manhattan property market remained lackluster.
“Unfortunately, the finance industry doesn’t seem to be in growth mode [in terms of office leasing], and it looks like big finance firms are in an adjustment period rather than in an expansion period,” said Aaron Jodka, a manager of U.S. market research at CoStar Group Inc. “The Bank of New York Mellon, for example, signed a lease [for 360,000 square feet at 225 Liberty St.] that was actually a downsizing move despite being the 14th largest lease deal of the year.”
“[The diversity of tenants] shows that we have industries across the board that are growing, especially in terms of a job perspective,” said Mr. Jodka.
Downtown Manhattan has become a popular destination among a growing number of tenants seeking to get the most out of the rent they’re paying. Ten of the 50 biggest deals were in the downtown market, for a total of more than 2.6 million square feet.
“Last year was a strong one, and it sets us up for continued growth for this year,” said Mr. Jodka. “We’re expecting to see these industries to contribute to the recovery of the office market.”
In another positive sign, the bulk of last year’s leases—29 out of the top 50—were new leases, while renewals accounted for 21.
BY YOONA HA