Where’s the city’s most expensive office space?
The crown has passed from Midtown to the more tech-centric Midtown South, which is now home to the most expensive office market in the country, according to a third-quarter market report Friday from JLL, the real estate services firm.
Average asking rents for Class A office space — in the city’s most premier buildings — in Midtown South rose to $83.19 per square foot in the third quarter of 2016, an increase of nearly 5 percent from the year before. The rents represent a 79 percent increase since 2009.
The vacancy rate for this type of office space in Midtown South — which includes Chelsea, Gramercy, Greenwich Village, Hudson Square and SoHo — hovered just below the 6 percent mark. Meanwhile in neighboring Midtown, the vacancy rate inched up to nearly 12 percent.
In Midtown, average asking rents for Class A space hit $81.91 per square foot, which was 2 percent higher than the year before, JLL found.
The boost in average asking rents in the past year was mainly fueled by higher-priced space at One SoHo Square and the newly constructed 860 Washington St., where Alibaba expects to expand onto an additional floor.
Midtown, however, had some high-profile deals, too.
Penguin Random House expanded by 188,000 square feet in a renewal and expansion that brought its total occupancy at 1745 Broadway to 603,605 square feet, and Bloomberg LP expanded by more than 204,000 square feet at 919 Third Ave., according to JLL.
In Downtown — where average asking rents were $62.78 per square foot, up about 1.6 percent from the year before — the largest office deal was inked by the New York City Department of Finance. The city agency signed for 182,750 square feet at 375 Pearl St., a former Verizon Data Center, near City Hall, undergoing a major upgrade that includes dismantling its windowless facade to make floor-to-ceiling windows on the building's upper floors.
The vacancy rate Downtown was about 11 percent.
