The luster is fading on some of midtown Manhattan’s shiniest skyscrapers.
Buildings in Midtown, from 30th Street to Central Park South at 59th Street, have more vacant blocks of contiguous office space than at the height of the recession in 2009, as landlords face increased competition from buildings downtown and at Hudson Yards on the far west side, according to a study by Savills Studley Inc., a New York-based real estate brokerage.
“The epicenter of this city has shifted several times before and is in the process of shifting again,” Michael Cohen, tri-state region president of brokerage Colliers International, said in an interview. Midtown is “the hole in the doughnut,” where landlords are vulnerable to extended vacancies and rents that probably won’t rise dramatically.
The area, traditionally the most prestigious and expensive U.S. office market, has turned into one where landlords must market space aggressively, pour money into renovations and seek early lease renewals to retain tenants. The technology and media companies that have driven New York’s leasing in recent years have clustered in midtown south, between Canal Street and 30th, or moved to lower Manhattan in search of cheaper rents.
At the end of June, 35 blocks of at least 150,000 square feet (14,000 square meters) of contiguous space each were on the market in Midtown, compared with 31 available in mid-2009, according to Savills Studley. Vacancies may rise next year as tenants continue to consolidate, Keith DeCoster, the study’s author, said in an e-mail...Manhattan Vacancies Rise in Epicenter Shift: Real Estate
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