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Category Archive225 Varick Street

Top 10 Leases of the Month: September

Earlier this year there were a number of prominent openings of movie theaters in Manhattan, and it looks as if Queens has finally gotten in on the action: The South Korean cinema chain—CJ CGV—announced that it’s opening a seven-auditorium 4D multiplex at the 1.2-million-square-foot mixed-use development Tangram in Flushing. (The 34,000-square-foot movie theater will be the first in the neighborhood in 30 years!)

But movie theaters are nothing in comparison to fast food, which seems to be making an unheard of push into New York (see our video on Taco Bell here). Shake Shack continued to vie for supremacy, with a 27,000-square-foot lease for a new headquarters and flagship in the West Village at 225 Varick Street.

Hot on the heels of the opening of its Brooklyn digs, the Japanese clothing and home goods chain, Muji, picked up a 13,000-square-foot lease at 127 East 59th Street (its eighth location in the five boroughs).

Beer lovers had much to toast: a new beer hall—Knickerbocker Social—took over an entire 12,776-square-foot building at 240 West 52nd Street in the Theater District, as the broker of the deal, Victor Menkin, told Commercial Observer. And Mikkeller NYC, a microbrewery with an outpost in Citi Field, also signed a 7,500-square-foot lease at 51-40 58th Place in nearby Woodside, Queens. And while, yes, we recognize the differences between cider and beer, Wilklow Orchards—an orchard in upstate New York—signed an 1,100-square-foot deal for a Bad Seed Cider Company at 585 Franklin Avenue in Crown Heights.

A little farther uptown from Knickerbocker, there was two pieces of interesting restaurant news at Time Warner Center. First, Bluebird, a West London restaurant, was opening its first New York City outpost in the 10,000-square-foot space vacated by the Italian restaurant A Voce. Separately, David Chang’s Momofuku signed a lease for a 4,000-square-foot noodle bar on the complex’s third floor. Downtown, a Canadian hospitality group took 10,000 square feet at the space vacated by Florian at 233 Park Avenue South, but as yet we have no word who will move in.

All that food and beer will no doubt induce the disciplined among us to head to the gym afterwards, and, fortunately, there were two pieces of fitness news: ClassPass just opened a 7,000-square-foot fitness studio in Industry City, at 80 39th Street, and the cycling company Peloton opened its first standalone showroom (and second store) on the Upper East Side at 1156 Madison Avenue, taking 3,165 square feet.

Source: commercial

Squarespace Grows to 143,000 SF at 225 Varick Street

Hosting platform and website builder Squarespace has leased two more floors at 225 Varick Street in Hudson Square.

Squarespace inked a 12-year deal for 49,700 square feet on the fifth and sixth floors of the building, where it already leased 93,000 square feet on the 10th through 12th floors in 2014. Asking rent on the new lease was in the high $70s per square foot, according to The Real Deal, which was the first to write about the transaction.

The tech firm is expected to move into its new space in April 2018, according to CoStar Group.

Shake Shack also signed on for 27,000 square feet of office and retail space in the property between Clarkson and West Houston Streets last month. The upscale burger spot will open a flagship restaurant in the ground-floor retail space and a test kitchen on the lower level in mid-2018. It will also move its offices, which are currently located in Union Square, into part of the third floor in the spring of 2018.

Rocco Laginestra and Paul Myers of CBRE represented Squarespace in the deal, and CBRE’s Howard Fiddle, Paul Amrich and Neil King represented landlords Trinity Real Estate, Norges Bank Real Estate Management and Hines. A spokeswoman for CBRE declined to comment.

Source: commercial

Manhattan Office Leasing Activity Held Strong in Q3: CBRE

The Manhattan office leasing market continues to show signs of strength via positive net absorption figures and double-digit percent increases over last year, according to CBRE’s latest Manhattan office market report released today.

Total leasing activity of 7.4 million square feet in the third quarter outperformed the five-year quarterly average by 12 percent, and took total Manhattan office leasing activity for the first nine months of 2017 to 21.1 million square feet—a 24 percent increase, year-to-date, on 2016.

But perhaps the strongest indicator of the market’s strength so far this year was the 1.45 million square feet of positive net absorption registered last quarter. The Midtown market, in particular, posted more than 1 million square feet of positive absorption for the first time since the second quarter of 2015.

At a media briefing discussing the figures, Nicole LaRusso, CBRE’s director of research and analytics for the tri-state region, cited strong employment growth figures in New York City that she said “has really been fueling a lot of this [leasing] activity” in the Manhattan office market.

LaRusso was joined by CBRE Vice Chair Paul Amrich and Executive Vice President Neil King at the briefing, held at Rockpoint Group and Highgate Holdings’ office development at 412 West 15th Street in the Meatpacking District.

The property, which is still under construction as workers continue to build out the interiors, served as an ideal setting for a discussion on the state of the Meatpacking District and Hudson Square office market. According to the brokers, the area has changed “drastically” as larger, more mature companies view it as an increasingly viable office destination.

King said that the West Side neighborhood’s culinary and cultural amenities are among the reasons “why people want to be here”—citing Shake Shack’s recent 27,000-square-foot deal for its new headquarters and flagship restaurant at 225 Varick Street in Hudson Square, as well as institutions like the Whitney Museum of American Art, which moved to the Meatpacking District in 2015.

Amrich noted that more than ever, companies are using their real estate as a tool to recruit new, young talent—a trend that has extended from tech, media and creative firms into the realm of financial services and insurance companies. He cited insurer Argo Group, which inked a 48,000-square-foot lease at Rockpoint and Highgate’s Meatpacking project earlier this year, as well as Aetna’s recent agreement for 150,000 square feet at nearby 61 Ninth Avenue, developed by Vornado Realty Trust.

As far as Manhattan leasing activity on a submarket-by-submarket basis, CBRE said the Midtown market saw 4.84 million square feet of leasing activity in the third quarter, which constituted a 19 percent increase on the five-year average. Asking rents in Midtown stood at $80.54 per square foot, flat from the previous quarter but down 1 percent from the same period last year.

Midtown South registered 1.14 million square feet of activity—down 8.8 percent below the five-year average for the supply-constrained market and fueled mostly by small deals below 25,000 square feet, which constituted 59 percent of all transactions in the submarket last quarter. Midtown South asking rents of $71.90 per square foot—which LaRusso noted have run up dramatically over the past decade from their range in the low $40s per square foot in 2009—are flat from the previous quarter but up 4 percent year-over-year.

In the Downtown market, 1.43 million square feet of leasing activity in the third quarter was 9 percent over the five-year average, with government tenants—such as the city agencies that have flocked to the Verizon Building at 375 Pearl Street—accounting for 30 percent of all activity in the quarter. The submarket continues to see tenant migration trends work in its favor, with 1.5 million square feet of space in the year-to-date period comprising tenants who have moved Downtown from elsewhere in the city. Downtown asking rents were up 1 percent from the previous quarter, to $61.95 per square foot.

Source: commercial