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Some Sublease Spaces in NYC Going for $30 Per Foot; Exodus from City Continues

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By: Denis Cyr

The inventory of sublease space on the market in NYC has skyrocketed, bringing asking rents to shockingly low numbers in some cases.

While asking rents for sublease space stood at an average of $61.55 per sq ft in Midtown, some landlords are, as of early November, asking as low as $30 per square foot, according to information from Cushman & Wakefield.

NY Observer reported: The downward pressure on rent is a natural consequence of the amount of sublease space flooding the market. In Manhattan, there were 16.1 million square feet of sublease space available during the third quarter, with Midtown set to add at least 600,000 square feet more before the end of the year, according to a report from Newmark.

That will put Manhattan over the top of the post-Great Recession peak of 16.3 million square feet, and above the all-time peak of 16.7 million square feet after the dotcom bust in 2002.

Prices are so low in fact, The NY post pointed out a low price of $25 per square foot on a prime stretch of Park Avenue

The NY Post noted: That mind-boggling low rent is what high-profile public-relations firm 5W is paying at 299 Park Ave. under a sublease from MarketAxess Holdings, which moved to 55 Hudson Yards. The annual rent is $708,400 for the entire 10th floor, 28,336 square feet.

the avenue’s “going to look like a shadow of itself until people start going back to their desks,” an executive of a longtime tenant told the Post.

“There are only about 50 people going to work at 299 Park every day, which is the same at lots of buildings, and not just on Park Avenue.”

Even now, at least one company is asking $30 per square foot for a 70,000-square-foot block, Lori Albert, a research director at Cushman told NY observer

Even space at The Empire State Building’s 2.7 million square feet, which are 94.2 percent rented has gone down in price.

NY post reported; The asking rent on the 10-year, 10-month lease was $69 psf. Savills’ Zev Holzman and Paul Revson repped Swedbank. Empire State Realty Trust’s Shanae Ursini repped the landlord in-house along with a JLL team led by Paul Glickman.

The beloved skyscraper’s larger tenants include LinkedIn, Coty and Shutterstock. ESRT pumped hundreds of millions of dollars into the tower over the past 10 years to burnish its public spaces, restore neglected portions and to bring its formerly antiquated infrastructure up to 21st-century standards.

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