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December
August
2014 2015

Year-End Summary - Record Highs Achieved


Our 2015 year-end report examines the trophy market performance over the past year, including:
Changes in the vacancy rate and asking rents
Deal volume with starting rents above $100 per sq. ft.
Top tier buildings that outperformed the market
At year-end 2015, the vacancy rate for Midtowns trophy building submarket decreased slightly to 7.7% from 8.0% at the
end of last year. By comparison, Midtowns general Class A vacancy rate also dropped slightly to 10.4% and is now at its lowest
level since 2008.
The average asking rent for direct space in Midtown trophy buildings increased 4% year-over-year from $99.58 per sq. ft. to
$103.61 per sq. ft. Among the super trophy buildings, the average asking rent for direct space is $125.95 per sq. ft., which
represents a 56% premium over Midtowns Class A average asking rent of $80.24 per sq. ft. (Super trophy buildings comprise a
narrower category of 19 buildings that are the highest-end properties in New York City and typically garner the highest rents.)
Rents in the high-end sector of the market gained strength throughout the year, as predicted. Tenants may want to prepare for
similar growth in 2016, particularly on preferred floors in the best buildings. Tenants can expect the most desirable sector of the
market trophy tower floors to continue to tighten.
Midtown Trophy Market
Direct Rents and Overall Vacancy by Quarter
Midtown Trophy Asking Rent (Direct)

Midtown Trophy Vacancy Rate

$75

12%

Vacancy rate

$103.61

$103.30

$100.53

$99.58

$98.10

$97.33

$98.27

$97.29

$93.99

$92.43

$92.57

$93.81

$97.73

$97.10

$96.24

$98.11

$95.37

$91.98

$90.36
$84.65

$84.03

$83.28

$80.28

$84.82

$88.81

$85

$95.96

Direct asking rent per square foot

12.1%
$95

14%

13.6%
$101.32

$105

10%
8.4%

8.5%

8.0%

7.7%

8%

6%

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August
2014 2015

Deal Trends - $100 per sq. ft. Transactions


With the exception of 2011, hedge funds have consistently trailed the S&P 500 since 2008. In 2015, the S&P 500 returned 1.4%,
compared to an approximate 3% average loss industry-wide among hedge funds. Despite the overall flat market and hedge fund
volatility, tenants paying top rents set an unprecedented record. This year, 138 transactions were completed at starting rents of
$100 per sq. ft. or higher, representing a 42% increase from the 97 deals in 2014. The number of these $100+ deals has
increased consistently since 2009. Despite the ever-increasing number of these high-end deals, it should be noted that they
represent only 10% of the total leasing volume in Midtown Manhattan in 2015 approximately 2 million sq. ft. of the 20 million sq.
ft. leased in Midtown buildings.
As reported earlier in 2015, a rumored hedge fund transaction at 425 Park Avenue, which has not yet closed, would be the first
at this Norman Foster-designed trophy property, currently under construction. This transaction of approximately 200,000 rsf
would be significant for not only its size, but also notable as the penthouse floors will garner the highest rent per sq. ft. ever paid
for commercial office space in NYC. Other highlights include:
There were 50 buildings in the $100 club in 2015, showing a huge increase from the 33 buildings on last years list,
indicating a wider concentration of properties. New entrants include several buildings that were able to achieve signature
rents for the first time due to recent renovations and repositioning: namely 437 Madison Avenue, 400 Park Avenue and 10
East 53rd Street.
The majority of these deals were completed by financial services tenants (81%):

42 hedge funds
28 private equity firms

42 other financial (investment


banks, wealth management)

26 non-financial (legal,
consulting, software, tech)

Although 9 West 57th Street had achieved the highest starting rent in Midtown for the past several years, in 2015, 767 Fifth
Avenue (GM Building) signed three deals with starting rents in excess of $200 per sq. ft. and recorded the highest starting
rent at $220 per sq. ft.
Since 2010, 375 Park Avenue (The Seagram Building) has attained the highest number of transactions with rents over $100
per sq. ft. 12 transactions were completed in 2015, for a total of 137,640 sq. ft.
Landlords with the largest number of $100+ deals are Vornado (28 deals 500,236 sq. ft.), Boston Properties (20 deals
362,104 sq. ft.), RFR (13 deals 148,366 sq. ft.), and Oxford Properties (13 deals 124,616 sq. ft.).
Of the 138 deals, 78 were new transactions, and 60 deals were renewals or expansions with existing building tenants.
The average size of transactions that achieved starting rents of at least $100 stayed consistent with the historical 15,000 sq.
ft. average at 15,077 sq. ft. The tenants who signed the largest leases of the year were of a wide range of industries and
were all incumbent tenants that either renewed or expanded. These tenants included a hedge fund that renewed for 119,911
sq. ft. at 601 Lexington Avenue, a private equity firm that renewed at 888 Seventh Avenue for 99,943 sq. ft., a tech firm that
expanded at 770 Broadway for an additional 79,998 sq. ft., a private equity firm that renewed at 787 Seventh Avenue for
51,032 sq. ft., and a financial firm that expanded by 44,000 sq. ft. at 1345 Avenue of the Americas.
2014 was the first year that deals in Midtown South signed north of $100 per sq. ft. This trend continued in 2015 with four
buildings: 51 Astor Place, 860 Washington, 11 Madison Avenue and 770 Broadway. 51 Astor Place returned to the top deal
roster in 2015 with one tenant of 13,017 sq. ft. The building is now fully leased. 860 Washington, while still under
construction, signed a two-floor lease for 22,000 sq. ft. Subsequently purchased by SL Green, 11 Madison achieved $100
rents with an expanding tenant. Vornados 770 Broadway was added to the $100 club with a major tech firms expansion.

12

10

0
375 Park Avenue
450 Park Avenue
640 Fifth Avenue
767 Fifth Avenue
350 Park Avenue
1330 Avenue of the Americas
712 Fifth Avenue
510 Madison Avenue
888 Seventh Avenue
1114 Avenue of the Americas
250 W 55th Street
40 W 57th Street
590 Madison Avenue
650 Madison Avenue
280 Park Avenue
10 E 53rd Street
725 Fifth Avenue
65 E 55th Street
452 Fifth Avenue
601 Lexington Avenue
667 Madison Avenue
400 Park Avenue
1140 Avenue of the Americas
1345 Avenue of the Americas
9 W 57th Street
461 Fifth Avenue
450 Lexington Avenue
660 Madison Avenue
540 Madison Avenue
535 Madison Avenue
437 Madison Avenue
101 Park Avenue
200 Park Avenue
245 Park Avenue
299 Park Avenue
320 Park Avenue
390 Park Avenue
499 Park Avenue
500 Park Avenue
30 Rockefeller Plaza
1177 Avenue of the Americas
1251 Avenue of the Americas
1350 Avenue of the Americas
787 Seventh Avenue
12 E 49th Street
152 W 57th Street
860 Washington
770 Broadway
51 Astor Place
11 Madison Avenue

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Number of Deals

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8
8
7

6
6 6
5 5 5 5 5 5

40

20

2005

2006

4 4 4

160

81

2007

3 3
2 2 2 2 2 2 2 2

18

2008

December
August
2014 2015

$100+ per sq. ft. Transactions


Completed in 2015 - By Building

12
10

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Top-Tier Transactions $100+ Starting Rents


Record Levels Achieved

140

120

100

80

60

138

91

80

50

56

18

19

2009

2010

2011

2012

2013

97

51

2014

2015

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$100+ per sq. ft. Transactions


New Deals vs. Expansions/Renewals
90

Number of Deals

80

78

70

60

60
50
40
30
20
10
0

new

expansion/renewal

$100+ per sq. ft. Transactions


Deal Size

80

69

70

Number of Deals

60
50
40

33

15,077 sq. ft.


average size

31

30
20
10
0

5
< 5,000 sf

5,000-14,999 sf

15,000 - 50,000 sf

>50,000 sf

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December
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December
August2014
2014

Building
Photo

Building

540 Madison Avenue

717 Fifth Avenue

1633 Broadway

Address

Southwest corner of East 55th


Street

Southeast corner of East 56th


Street

Between 50th & 51st Streets

Ownership

Boston Properties, Inc.

Equity Office Properties

Paramount Group, Inc.

Floor / sq. ft.

Partial 16th Floor 2,324 rsf

Partial 14th Floor 8,451 rsf

Partial 46th Floor 21,452 rsf

Asking Rent

$59.00 psf

$95.00 psf

$89.00 psf

Term

Through June 2022

Through January 2020

5-15 years

Sublandlord

Heraeus Metals New York LLC

Chubb Group of Insurance Co

Allianz

Comments

High end space with 1 large


office, 2 small offices, open
space for 3 cubicles, storage, IT
room and a pantry.

Recently built high-end space


facing 5th Avenue and 56th
Street. Unit contains 11 offices, 1
conference room, open space for
10 workstations, copy, storage,
IT and a pantry.

Excess space built out and


never occupied by Allianz with
23 external offices, 10 internal
offices, open space for 44
workstations, 2 conference
rooms, pantry, IT and a storage
room.

Floorplan

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Building
Photo

Building

850 Third Avenue

1095 Avenue of the Americas

747 Third Avenue

Address

Between 51st & 52nd Streets

Between 41st & 42nd Streets

Between 46th & 47th Streets

Ownership

Shorenstein Properties

Ivanhoe Cambridge, Inc.

William Kauffman Organization

Floor / sq. ft.

Partial 16th Floor 3,845 rsf

Partial 14th Floor 10,506 rsf

Partial 26th Floor 1,837 rsf

Asking Rent

$62.00 psf

$75.00 psf

$66.00 psf

Term

Through February 2017

Through September 2020

Through August 2018

Sublandlord

Slate Property Group

Russell Investments

OTCex

Comments

Second generation pre-built with


4 offices, 1 conference room,
open area for 25 people, pantry,
and IT room. Direct presence
off elevators.

Built with above standard


finishes, the space includes 2
small conference rooms, open
seating for 42 people and a
pantry. Space has views of
Bryant Park.

Recently built space with 1


conference room, open seating
for 15 traders, IT closet and a
pantry.

Floorplan

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Building
Photo

Building

1095 Avenue of the Americas

60 E 42nd Street

675 Third Avenue

Address

Between 41st & 42nd Streets

Between Park & Madison


Avenues

Between 42nd & 43rd Streets

Ownership

Ivanhoe Cambridge, Inc.

Empire State Realty Trust

The Durst Organization

Floor / sq. ft.

Entire 5th Floor 33,188 rsf

Partial 11th Floor 2,209 rsf

Partial 8th Floor 2,994 rsf

Asking Rent

$70.00 psf

$50.00 psf

$62.00 psf

Term

Through August 30, 2020

Through December 2017

Through October 2018

Sublandlord

Instinet Incorporated

ABV Management

National Life Insurance

Comments

High end space built with 34


offices, 5 conference rooms, 123
workstations, a pantry, and an IT
room. Space has a 15 ceiling
height and incredible views of
Bryant Park.

2nd generation space built with 3


offices, 1 conference room, open
area for 6, and a pantry.

Pre-built with reception, 6


offices, 1 conference room, and
a pantry. Space is directly off
the elevators.

Floorplan

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in todays changing market

December
2015
August 2014

Recently Completed Transactions Financial Service Firms


Type

Tenant

Address

Square Feet

Renewal

Silvercrest Asset Management Group

1330 Avenue of the Americas

41,600

New

Sachem Head Capital Management

250 W 55th Street

14,542

New

Rafferty Holdings LLC

1301 Avenue of the Americas

8,828

New

GMF Capital

650 Madison Avenue

7,770

New

The Valence Group

90 Park Avenue

7,706

New

Hollis Park

579 Fifth Avenue

7,620

New

SLR Acquisitions

110 E 42nd Street

6,596

New

IPG Management

1370 Avenue of the Americas

4,676

New

Exiger

600 Third Avenue

3,744

For further information, please contact:


Cynthia Wasserberger at 212.812.5816 or cynthia.wasserberger@am.jll.com

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December
August
2014 2015

Cynthia Wasserberger
Managing Director
(212) 812-5816
Cynthia.Wasserberger@am.jll.com
Cynthia has been actively involved in providing real estate services to financial service clients over
the past 18 years. She assists key prime brokerage groups and focuses on transaction work for
numerous boutique hedge funds and investment management firms. She has completed over 100
deals in this arena. Cynthia holds a business administration degree from University of Florida, and
a Master of Science in Real Estate Finance from New York University. She is an active member of
The Real Estate Board of New York and the New York University Real Estate Alumni Association.
She is also involved with The Doe Fund organization in New York, and was recognized in 2009 as
a Woman of Valor by the Capuchin Food Pantry / St. Francis of Assisi.

Jonathan Schifrin
Senior Vice President
(212) 812-5832
Jonathan.Schifrin@am.jll.com
Jonathan Schifrin is a senior vice president in JLLs New York Office and is a tenant representation
specialist. Mr. Schifrin has more than eight years of experience in the commercial real estate
industry. Mr. Schifrin holds a master of science degree in real estate from New York University and
a bachelor of arts degree from Emory University. He is actively involved with Israel Bonds and
serves as a vice chairman of the New Leadership Cabinet.

Hayley Shoener
Associate
(212) 812-6535
Hayley.Shoener@am.jll.com
Hayley Shoener is an associate in JLLs New York office and specializes in tenant representation.
Ms. Shoener focuses on business development, market research, transactional support and
financial analysis. She also worked as an intern at JLL in both the Research and Brokerage
departments in 2012. Ms. Shoener graduated cum laude from Boston College in 2013 with a
bachelor of arts degree in History and a minor in French. She is a member of the Real Estate Board
of New York.