Big New York Real Estate Deals
A slew of financial services firms have leased large blocks of office space in recent weeks, many for rents approaching $200 a square foot, belying fears of a market slowdown.
Among the largest deals are those of investment firm AllianceBernstein, which has inked a deal to expand by about 151,500 square feet at 1345 Sixth Ave., and National Financial Partners, a network of financial advisers that is moving into a nearly 100,000-square-foot space at 340 Madison Ave. In addition, PricewaterhouseCoopers has a lease pending for 200,000 square feet at 100 Park Ave., according to brokers familiar with the deal.
“Despite what is happening on Wall Street, we are still seeing a good level of momentum,” a broker at Cushman & Wakefield who represented National Financial Partners, Alexander Chudnoff, said.
A smattering of the recent deals have staggering rents, including the Carlyle Group’s 23,400-square-foot expansion at 520 Madison Ave., with rents that start at $180 a foot and eventually rise to $195 a square foot, and Royal Bank of Scotland’s 70,000-square-foot deal at 1095 Sixth Ave. starting at $140 and ramping up to $160 by the end of the 15-year lease.
These leases are important indicators that the financial services industry is growing. The sector accounts for roughly a third of office space leased in Manhattan, and is a key driver of the historically-high rents witnessed over the past several years. Banks and money managers have been taking a beating in the current market, with all the major investment banks — save for Goldman Sachs — reporting earnings losses in the third quarter. In addition, the industry cut more than 10,000 employees in the New York and New Jersey region in August, according to executive employment firm Challenger, Gray & Christmas.