Leasing’s Sixth sense
Corridor retakes Midtown top spot
SIXTH Avenue has reclaimed its title as Midtown’s No. 1 office-leasing corridor, as measured by the lowest percentage of vacant space — the latest lead change in the never-ending bragging-rights battle with Park Avenue.
Colliers reports that Sixth Avenue’s fourth-quarter occupancy at 11.5% of space available was the lowest of any Midtown corridor and slightly bested Park Avenue’s 11.8%.
The eensy edge now enjoyed by what only tourists call the “Avenue of the Americas” might not matter much. But we expect grumping from Park Avenue landlords who turn downright defensive every time we say nice things about Sixth, claiming we “give it so much attention.”
We do, but not only because it’s home to the New York Post. While the world regards Park Avenue as synonymous with Gotham’s power and wealth, many still regard Sixth as an also-ran to Park as an office mecca while lacking Fifth Avenue’s retail prominence, Madison Avenue’s glamour and Broadway’s bright lights.
We regard it as our duty to correct them.
CBRE’s most recent survey had Park Avenue ahead with a mere 9.8% availability, compared with about 20% in Manhattan overall. But brokerages often come up with slightly different data depending on what their samples include and on how far in the future they measure availability.
Colliers’ Michael Cohen and Franklin Wallach are confident that Sixth Avenue not only beats Park Avenue for lowest vacancy, but has done so since the onset of the pandemic in 2020.
Sixth Avenue “historically outperforms the rest of Midtown,” Wallach said.
Pricey redesigns
According to Colliers, vacancies on Sixth rose only to an average 11% since the second quarter of 2022, while they rose on Park to as high as 17.5% in the second quarter of 2021 when a few large tenants moved to the far West Side.
However, Park has since narrowed the gap to near parity.
The doldrums that afflict FiDi, parts of Midtown South and Midtown Third Avenue are nowhere to be found on Park or on Sixth.
Both boulevards have the advantages of new or recent construction that major tenants crave (e.g., 425 Park Avenue and One Vanderbilt on Park, One Bryant Park and 7 Bryant Park on Sixth). Older properties on both avenues have been redesigned and modernized at great expense.
Park Avenue’s prime 17-block stretch is undergoing a $32 billion public and private investment frenzy, according to advisory firm Weitzman Associates. That includes the $4 billion JP Morgan Chase headquarters tower now under construction.
But Sixth is enjoying its own new lease on life as owners reinvented midcentury properties, like Rockefeller Group did with the former Time + Life tower at 1271 Sixth. And Sixth can claim the largest single new lease of 2023 — law firm Paul Weiss’ move to 765,000 square feet at Fisher Brothers’ 1345 Sixth.
Colliers’ Cohen, meanwhile, points out a little-recognized Sixth Avenue strength.
“The biggest difference I see between Sixth and Park is that Sixth somehow managed to become an acceptable alternative to Midtown South for tech firms,” Cohen said.
They include SalesForce — the largest tenant by far — at 1095 Sixth, Global Relay USA at 1155, Indeed.com at 1120 and Take-Two Interactive at 1133.
The lure for many of them was proximity to Bryant Park, Cohen said. “When we worked on finding a location for Global Relay’s expansion [from a much smaller space in Midtown South], their directive to us was, ‘Bryant Park,’” he said.
Sixth still is best known for what Cohen calls “stodgier” industries such as finance and law. But it’s home as well to media giants such as Post parent News Corporation and Fox Corporation and to one of Colliers’ competitors, Cushman & Wakefield.
While Sixth Avenue is hardly cheap, it can seem a bargain for some tenants, with average asking rents of just over $82 per square foot compared with more than $90 psf on Park, Wallach noted.
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