Third Avenue is no longer the best-kept secret for office space in Manhattan.
Over the past two years, a myriad of companies have been coming to the Third Avenue Midtown East corridor—between East 39th Street and East 57th Streets—as an alternative to pricier Midtown addresses. And demand on Third Avenue is still increasing as new construction projects Downtown and on the Far West Side are asking astronomical rents.
The amount of available space along Third Avenue has been cut by nearly 50 percent, from almost 4 million square feet to just over 2 million, from the end of 2013 to the third quarter of 2015, according to a new Savills Studley report provided exclusively to Commercial Observer. And within the past year—from the final quarter of 2014 to the third quarter of 2015—there have been more than 900,000 square feet of leases signed on the corridor.
Third Avenue “offers a lot of value for tenants that are looking for discounted space or amenity-loaded buildings that are still close to transportation,” Heidi Learner, Savills Studley’s chief economist, who authored the report, told CO. “As new buildings come online, new construction tends to have higher asking rents. It is going to make asking rents on Third Avenue look that much more attractive.”Third Avenue Office Space is Now in High Demand for a Mix of Tenants
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National Office Sector Report (Q2 2015)