Office Rents on Fifth Avenue Rank No. 2 For Most Expensive
Office rents on Midtown Manhattan’s Fifth Avenue are living up to the street’s pricey reputation, according to a new ranking of the nation’s most expensive office strips.
Fifth Avenue came in second behind California’s Sand Hill Road in Menlo Park, recording an average asking rent of $116.04 a square foot, and top asking rents as high as $185 a square foot, according to JLL’s 2017 Most Expensive Streets. Sand Hill Road’s average asking rent reached $119.38 a square foot.
Popular with high-end investment and law firms, the office neighborhood along Fifth Avenue from 50th Street to 61st Street moved up from its third place in JLL’s previous ranking of expensive office streets in 2015, according to JLL.
“When you think about Fifth Avenue buildings, they’re comprised of a subset that are all proximate to the park [Central Park] and have stellar park views,” said Mo Beler a JLL managing director.
The Fifth Avenue office corridor’s vacancy rate of 11.9% in the third quarter was higher than Manhattan’s overall rate of 10.2%, but Mr. Beler said the almost 2 percentage point difference is the norm.
In recent years, a number of high-profile hedge funds and financial firms have signed leases to relocate from Manhattan’s traditional high-price office neighborhoods, which includes the upper stretch of Fifth Avenue in Manhattan, to the emerging mixed-used development called Hudson Yards on the far West Side.
Still, some of the building owners are generational landlords who can afford to hold out for premium rents and the right tenant, Mr. Beler said.
“I think Fifth will remain a top candidate for a very long time,” he said.
Also in the New York metropolitan area, Greenwich Avenue in Greenwich, Conn., ranked among the most expensive office streets. The stretch between Route 1 and the Greenwich train station fell one spot from fourth to fifth, coming in behind Mission Street in San Francisco at No. 3 and Main Street in Cambridge, Mass., at No. 4.
Average office asking rents for the Greenwich Avenue corridor, also home to hedge funds and private-equity firms, was $86.53 a square foot, with prices on the upper end hitting $101 a square foot, according to the report.
The avenue will always have some of the most expensive real estate in Fairfield County, said George Walker a JLL executive vice president, but the greater Central Greenwich office market faces competitive pressure from surrounding markets such as Stamford. Conn., as companies look for more.
Source: The Wall Street Journal, December 11, 2017 5:30am
Author: Keiko Morris
Image Credit: Alexander Cohn/Wall Street Journal
Read More: https://www.wsj.com/articles/office-rents-on-fifth-avenue-rank-no-2-for-most-expensive-1512988201