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Weekly Market Report - March 5, 2020

Amazon Leases Space in Queens & 10th Avenue in Manhattan

Amazon signed a 10-year lease at Rentar Plaza in Middle Village of Queens. The deal is for 300,000 square feet; 109,000 square feet will come from current occupant Metropolitan Museum of Art and 190,000 square feet is coming from the vacated space left behind by Kmart and Toys R Us. The company leased it for the mid 20’s. Amazon also leased 335,408 square feet of office space at 410 10th Avenue. SL Green is currently redeveloping the building as a Class A office property.


NYC Commercial Real Estate News

Developer Safehold Inc. is starting construction on a 42-story, 670,000 square foot office building at 425 Park Avenue. It will include office space and 18,000 square feet of retail space.

Law firm Debevoise & Plimpton signed a 530,000 square foot office lease for its new headquarters at The Spiral. The Spiral is a 2.8 million square foot office building currently being built in the Hudson Yards district. The law firm will move from their current location to floors 40 through 52 in the 65-story tower. Because of this deal, The Spiral is now 54 percent leased with other tenants including Pfizer, and AllianceBernstein.


Dock 72 Update with WeWork

After three years of construction, last fall Dock 72 opened. The building is in the Brooklyn Navy Yard, and WeWork signed as its anchor for a third of the 675,000 square feet the building offers. However, since then leasing has been slower than expected and interest in tenants taking space at WeWork has stopped. While the location has undergone a big redevelopment, its still far from the subway station, and lacks some of the worker amenities that other neighborhoods in the city have. The 30,000 square feet of amenity space has yet to open; it was supposed to open at the end of 2019, but it is now expected to finish in April. The CEO of Rudin Management Company, who owns the building with Boston Properties, is still confident that the building will lease. Dock 72 is asking for rents in the mid-50’s to the high-60’s per square foot, which is above the average asking rent of the borough last year at $43.88.


WeWork Hires New COO, Shyam Gidumal

WeWork hired Shyam Gidumal as its new chief operating officer. Gidumal was a former partner and principal for Ernst & Young, where he headed up the retail and consumer products practices in the company. He will bring his extensive retail experience and help the new CEO, Sandeep Mathrani, get WeWork out of the trenches.


Wells Fargo Leads $973 million Construction Loan to St. Johns Terminal

Wells Fargo has been selected to lead the $973 million construction loan for the redevelopment of St. John’s Terminal. Other banks are coming into the deal as syndicate participants. This is one of NYC’s most buzzed about projects and the 1.3 million square foot building has Google as its sole tenant. Google selected St. John’s as part of its plan to invest $1 billion in its Google Hudson Square campus. The company plans to move into St. John’s in 2022.


Apple Signs New Lease

Apple is set to sublease 200,000 square feet of space in Macy’s office at 11 Pen Plaza. The company will move in once Macy’s moves its corporate offices to Long Island City this summer. Macy’s occupies over 638,000 square feet from the fourth floor to the 14th of the 1.15 million square foot building.


Foreigners Falling Back in Love with New York

Last year 30 new foreign operators opened stores in New York City. In prior years, the economics between the U.S. and foreign countries didn’t work. Now, rents are lower, and landlords are becoming more flexible. Last year was a rebound year for retail in Manhattan with leasing increasing slowly. The dining and beverage sector led leasing with 33 percent and apparel came in with 22.3 percent. Throughout 2019, there was a total of 2.8 million square feet of retail was leased. Between 59th and 86thStreets on Madison Avenue was the third most expensive corridor in the city with rents up to $802 per square foot. Fifth Avenue had the highest asking rents for the final quarter of 2019 at $1,775 per square foot.

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