Last Monday, Facebook signed a lease for 730,000 square feet at Vornado’s Farley Building by Penn Station. When it moves in, Facebook will occupy all the office space in the building, which has been under construction in part of Vornado’s $2 billion effort to renovate the neighborhood around Penn Station. Besides Facebook, the Farley Building will include 120,000 square feet of retail space and the Moynihan Train Hall. Facebook’s other office space in the city include more than 1.5 million square feet at 30, 50, and 55 Hudson Yards, and space at 770 Broadway.
The pandemic has brought a lot of changes to the world. In the office leasing market, a revolutionary change is happening. VTS, the commercial real estate industry’s leading leasing and asset management platform, launched its VTS Market in June. This is the first integrated online marketing platform where landlords and their agency teams can lease their available spaces remotely. It eliminates the need for tenant rep brokers to tour hundreds of physical office locations. Every property on this platform will have over 250 data points plus professionally shot video and 3D representations. Brokers can share these spaces virtually and create a shortlist of all locations to visit in person before making a final decision. VTS Market also offers virtual test fits. This platform was built specifically with tenant rep brokers in mind, giving them a specialized tool to help attract new clients. We hope this is successful and can eliminate the use of CoStar, which has become a monopoly. Unfortunately, if its successful CoStar will probably take over the company.
International investors have found a renewed sense of urgency to move back into US markets. With “low interest rates, currency hedging costs against the US dollar, and lower asset valuations, the investors have begun underwriting and bidding aggressively.” In the first half of year, investors were focusing more on multifamily and industrial properties, including data centers, life sciences and medical offices. However, general activity from foreign investors has gone down this year, following last year’s decrease as well. Covid-19 has changed the business; with travel restrictions make it hard for investors to come and see the new market. Some investors take an extra step and move to show determination or send an employee out for a month-long trip in order to win the deal. Right now, anything can make or break a deal. “It’s a combination of price and terms. Even if the price is good, but the terms look like they might fall apart in two weeks, bids won’t be accepted.”