Outsized leases drove business for the top commercial brokerages last year, but 2018 has not started off with the same bang
(Illustration by Ryan Peltier)
When News Corp and 21st Century Fox expanded their Midtown office footprints to a combined 1.2 million square feet in January 2017, it kicked off a hot streak for the Manhattan leasing market. And neither the market nor the brokerages that negotiated those blockbuster deals looked back last year.
For CBRE 鈥?which represented News Corp and Fox in those dual deals 鈥?and Cushman Wakefield, which represented the owners of 1211 Sixth Avenue, the lease expansions (and extensions) were the first of many biggies in a year when mega transactions played an outsized role.
鈥淚 wouldn鈥檛 have predicted at this time last year that we would鈥檝e had as strong a year in the market as we did,鈥?said powerbroker Mary Ann Tighe, CEO of the tri-state region for CBRE.
This month, with that in mind, The Real Deal pored over hundreds of deals and ranked the top players in the Manhattan office leasing space 鈥?the biggest driver of fee revenues for the largest commercial brokerages.
CBRE once again took the top spot, racking up about 16.6 million square feet worth of Manhattan deals in 2017 on both the tenant and landlord sides. That was up from 14.5 million square feet back in 2014, the last time TRD published this ranking.
Cushman, which leased 12 million square feet, clocked in at No. 2. It was followed by Chicago-based JLL (with about 6.4 million square feet), Newmark Knight Frank (fresh off its IPO with roughly 4.6 million square feet), tenant rep firm Savills Studley (with 3.7 million square feet) and Colliers International (with 2.5 million square feet). Rounding out the top 10 were Adams Company, Avison Young, Cresa New York and ABS Partners Real Estate.
In all, Manhattan saw 36.8 million square feet of space leased up in 2017, including both new leases and renewals, according to CBRE. That was up 17 percent year over year 鈥?and the highest deal volume since 2014, which logged 38.8 million square feet. And 2017 was the second most active year since 2006 for new leases, with 28.5 million square feet of those deals inked.
That strong level of activity was thanks to an unusual number of big deals.
Activity for blocks of 50,000-plus square feet exceeded the average for the past five years, according to CBRE鈥檚 data. Deals greater than 250,000 square feet did extraordinarily well, too. Tenants inked 10 new mega leases for more than 250,000 square feet in 2017, double the number in 2016 and outperforming the five-year average by nearly 90 percent.
But it鈥檚 already clear that it鈥檚 going to be difficult to replicate 2017鈥檚 performance this year. Brookfield Property Partners鈥?/a> chair, Ric Clark, said as much last month at a luncheon hosted by the Real Estate Board of New York, though he noted that tech companies are growing and financial services firms are expanding.
鈥淚 think it will be a good year, but I don鈥檛 know if we鈥檒l be at the same levels as last year,鈥?he said.
Moving the needle
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