commercial real estate

New York City Rental Market Shows Signs of Cooling with Increased Vacancy Rates

By Columbus International,17 January 2024

The residential rental market in New York City has been gradually cooling, with an increase in inventory and a rise in the rental vacancy rate in Manhattan to 3.4 percent, the highest level since July 2021. According to the December market report by Miller Samuel for Douglas Elliman, the median rental price in Manhattan remained flat at $4,050 per month on a year-over-year basis. In contrast, Brooklyn’s median rent increased by 5 percent to $3,469, although it was still down from its record high in July.

The higher vacancy rate in Manhattan suggests that rents are likely to decrease further across the five boroughs in 2024. This shift is attributed to landlords facing challenges in retaining tenants, leading to an anticipation of weakness in the market. The overall economic climate, coupled with the Federal Reserve’s promise of interest rate cuts next year, supports this trend. Listing inventory has grown in both Brooklyn and Manhattan over the past year, resulting in declining average rents and significant increases in new leases signed in December. Manhattan’s average asking rent decreased by 3.8 percent from November to December, reaching $4,952, and dipped 5.6 percent from the previous year. Meanwhile, new residential leases in Manhattan increased by nearly 8 percent to 3,632, a 14 percent year-over-year growth. Brooklyn experienced a decrease in the average monthly rent to $3,754 in December, down 0.8 percent from the previous month and 1.6 percent from December 2022.

However, the median rental price rose by 5 percent year-over-year to $3,469. The listing inventory in Brooklyn increased by 8 percent compared to the previous year, with a 115 percent surge in the number of new leases signed. In Queens, Elliman and Miller Samuel tracked only Long Island City and Astoria. Average asking rents in these areas rose by 6 percent month-over-month to $3,601, and nearly 10 percent on a year-over-year basis. The number of new leases signed in northwest Queens increased by 26 percent from the previous month and 58 percent from December 2022.

Manhattan Real Estate Sees Record Cash Transactions Despite Mortgage Rate Surge

By Columbus International,4 January 2024

Manhattan’s residential real estate landscape is witnessing a historic surge in cash transactions for condominiums and co-ops, setting a new record despite recent signs of a slight easing in mortgage rates.

According to the Manhattan quarterly sales report by Douglas Elliman, compiled by appraiser Miller Samuel and released on Wednesday, cash sales accounted for over two-thirds of transactions in the fourth quarter, marking a significant increase from the third quarter’s 56.7%. This surge in cash purchases is attributed to a “sharp rise” in mortgage rates, reaching the highest levels since 2000.

Freddie Mac data reveals that by October, the 30-year fixed-rate mortgage had climbed to nearly 7.8%, a level not seen since 2000, driven by the Federal Reserve’s series of rate hikes over the past two years. However, there was a slight decrease below 7% in mid-December, and recent indications suggest a continued downward trend in rates. The Federal Reserve has hinted at the possibility of further rate cuts this year, which could potentially stimulate the sales market.

The fourth-quarter report also highlights a 5.1% year-over-year increase in the median sales price in Manhattan, reaching $1.16 million. This uptick marks the first increase in five quarters and represents the second-highest fourth-quarter level on record. Concurrently, the year-over-year listing inventory declined for a third consecutive quarter, contributing to the overall market dynamics.

Jonathan Miller, the President and CEO of Miller Samuel, anticipates that potential rate cuts by the Federal Reserve could invigorate the sales market, diverting demand from the highly competitive rental market. This shift in demand is evident in a separate Elliman report, revealing a drop in the median rent in November for the first time in over two years, signaling a cooling trend in Manhattan’s previously red-hot rental market.

Valentino’s latest boutique has just landed at 654 Madison Avenue (Source: V Magazine)

By Columbus International,10 November 20239 November 2024

Valentino‘s latest boutique has just landed at 654 Madison Avenue. After introducing their innovative global retail concept in 2022, which revolves around creating distinctive spaces based on a reinterpretation of the building’s structure through various sales experiences and approaches to interior architecture, the new flagship store in Manhattan is now a pivotal destination for Valentino enthusiasts. Boasting a selling space of 1142 sqm, the new establishment is situated on the corner of Madison Avenue and 60th Street. The building spans three floors, including a basement, a ground floor, a mezzanine, and a second floor. Adorned with iconic columns and tall windows, the space is meticulously designed to provide a glimpse into the materials and architectural silhouettes that define the essence of the boutique’s interiors.

Each floor narrates a unique visual story through chromatic compositions and thoughtfully curated materials palettes, incorporating the maison’s signature red tone. Upon entering, customers are welcomed by grand double doors featuring sculptural marble handles, inspired by the work of artisans whose creations are showcased in Valentino stores worldwide. These handles, crafted in ceramic by the artist Massimiliano Pipolo, are also incorporated within the store. Visitors can explore the grand features of the building, including seven-meter-high ceilings, exposed steel columns (spanning all floors), and a rough concrete finish around the perimeter, highlighted by illuminated shelving dedicated to Valentino Garavani Accessories.

The space is intelligently divided into functional zones through bespoke elements, such as a commanding green onyx display unit at the center, and diverse materials like marble carpets and concrete on the floors that delineate specific areas and functions. Towards the rear of the store, various interpretations of the iconic Rosso Valentino are displayed, along with a dedicated area for footwear featuring floors and seating in contrasting travertine red against the luminous onyx and concrete shelving. On the second floor, the Valentino Women Ready-to-Wear collection is showcased in oversized red lacquered wardrobe structures and matching seating, complemented by chequered floors in white Botticino and black Nero Marquina marbles. La nuova boutique di Valentino è appena sbarcata al 654 di Madison Avenue

Source: V Magazine

U.S. Housing Market Defies Odds: Rising Home Prices Persist Amid Economic Uncertainties

By Columbus International,17 October 2023

In recent months, the U.S. economy has stood at a crossroads, teetering between the specter of recession and the persistent challenge of soaring inflation. Amidst these financial uncertainties, a surprising resilience characterizes the housing market, where demand remains robust, and home prices continue to ascend.

Resilience in Housing Market Despite Economic Divides
Efforts by the Federal Reserve to curb inflation have led to significantly higher borrowing costs, marked by a 22-year high in mortgage rates. Despite these elevated rates, the housing market has defied projections of a decline. Goldman Sachs, in a notable revision, now forecasts a 1.8 percent increase in average home closing prices by year-end, a significant shift from their prior estimate of a 2.2 percent decline. This resilience can be attributed to the relentless demand for housing and a limited supply in the market. Strong demand, driven by a variety of factors including demographic trends and a growing population, coupled with constrained housing inventory, has fueled consistent price hikes. The situation is reflected in the recent revision of Goldman Sachs’ home-price forecast, indicating that the market remains on an upward trajectory despite the prevailing economic uncertainties.

Commercial Real Estate Faces Challenges
In contrast to the housing market’s buoyancy, the commercial real estate sector grapples with multiple challenges. The lingering effects of the pandemic, such as rising office vacancies, combined with the Federal Reserve’s efforts to control inflation through interest rate hikes, are impacting this sector. Higher interest rates are particularly concerning, leading to anticipated commercial mortgage renegotiations in the next few years. Regional banks are notably vulnerable in this scenario, exposing potential risks in the commercial real estate sector. The divergent fates of the housing and commercial real estate markets underscore the specific dynamics at play in each sector. The housing market’s resilience is attributed to its strong fundamentals and the essential need for shelter, while the commercial real estate market faces complexities due to evolving work trends and economic policies.

Yield Surge Raises Economic Eyebrows
The surge in the 10-year U.S. Treasury note yield to a 15-year high at 4.258% raises concerns about the potential economic impact. Higher yields could lead to increased borrowing costs, affecting various markets, including stocks, bonds, and housing. Of particular concern is the potential impact on mortgage rates, which could pose challenges for both prospective homebuyers and those seeking to refinance. The housing market, though displaying remarkable resilience, is not entirely immune to these economic shifts. An increase in mortgage rates could alter the affordability dynamics, potentially slowing down the rapid pace of home price increases. Investors and industry stakeholders closely watch for cues on how these yields might stabilize and their subsequent influence on the housing market.

Federal Reserve Balancing Act
The Federal Reserve’s cautious approach, as reflected in the minutes of their July 2023 meeting, showcases the delicate balance they strive to maintain. Controlling inflation remains a priority, and this is evident in the interest rate hikes implemented to slow the economy and curb rising prices. However, the Fed grapples with the need to carefully weigh these actions against their potential negative impacts on the economy, such as slowing hiring and increased business loan costs. The central bank’s actions are being closely scrutinized by various sectors, including the housing market. Their decisions significantly impact borrowing costs and, subsequently, housing affordability. Striking the right balance is crucial for the Fed to navigate the complex economic landscape and support the stability of both the housing market and the broader economy.

Housing Market Defies Mortgage Rate Surge
The surprising resilience of the U.S. housing market in the face of soaring mortgage rates stands as a testament to its robustness. Despite rates doubling over the past year and a half, major homebuilders’ shares have rallied, surpassing broader stock indices. The constrained housing supply, coupled with higher mortgage rates, has essentially trapped existing homeowners in their properties, diminishing available housing stock and compelling potential buyers to explore new properties. This resilience is underpinned by the fundamental need for housing. Regardless of mortgage rate increases, the demand for homes remains high, particularly due to demographic trends and societal shifts. The housing market has adapted to the new normal of higher rates, showcasing its strength and stability amidst evolving economic conditions.

A Glimpse into the Future
While concerns about the U.S. housing market persist due to the rapid rise in mortgage rates and a sharp slowdown in home sales, economists and analysts foresee a moderate market correction, rather than a crash on the scale experienced during the Great Recession. Factors such as low inventories, cautious building practices, demographic trends, strict lending standards, and low foreclosure activity contribute to the market’s resilience. These indicators, combined with the enduring demand for housing, hint at a market that is likely to continue its upward trajectory in a more measured manner. The housing sector is expected to adapt and find equilibrium even in the face of economic uncertainties, reinforcing its position as a cornerstone of the American economy. The U.S. housing market remains a pillar of strength amid economic uncertainties, continuing to surprise pundits and analysts with its unwavering growth. As the economic landscape evolves, only time will reveal whether this resilience is a temporary phenomenon or a lasting testament to the fundamental stability of the housing sector in the United States.

Redefining Luxury Living: Branded Real Estate’s Ascendance in Miami and Beyond (Source: The New York Times)

By Columbus International,11 October 2023

Exploring a 10-mile stretch along the enchanting Miami coastline reveals a plethora of opulent shopping opportunities. However, it’s not haute couture or luxury cars that shoppers are taking home with them; they are securing homes with prestigious labels. The market for branded real estate is experiencing an impressive surge. According to a report by Knight Frank, global real estate consultants, the demand for luxury condominiums bearing renowned names is expected to grow by 12 percent annually until 2026. Just as purveyors of blue jeans and handbags have long recognized the allure of a prominent label, property developers now understand its significance. In virtually every major city, prospective homeowners can peruse residences offered by well-known hospitality brands such as Four Seasons, Aman, and Ritz-Carlton. Surprisingly, more unconventional brands are now venturing into this trend, with luxury car and fashion couture companies eyeing condos as their next frontier. In the tranquil enclave of Sunny Isles Beach, nestled within Miami-Dade County, some of the prominent towers boast illustrious names like Porsche Design Tower, Residences by Armani Casa, and the upcoming Bentley Residences. By 2026, the Bentley Residences will soar into the sky, featuring an exterior adorned with recessed glass in Bentley’s iconic diamond-in-diamond quilted design, instantly recognizable to aficionados of the esteemed British automaker. All of these remarkable developments share a common visionary: Gil Dezer.

For over a decade, he has been quietly placing his bets on this moment, expanding his brand partnerships as Miami’s real estate values continued to climb. “Today’s automobile brands aspire to be more than just cars; they aim to establish themselves as lifestyle brands,” remarks Mr. Dezer, who first joined forces with Porsche in 2012. “This sentiment extends to everything, from golf clubs to sunglasses, and we were fortunate to be at the forefront of this evolution in real estate.” The New York Times reports that Mr. Gil Dezer, the scion of the Dezer Development empire in South Florida, has played a pivotal role in marrying two seemingly disparate worlds: real estate and automobiles. The Dezer Development, owned by his father, Michael Dezer, commands an impressive presence, boasting ownership of nine towering structures sprawled over nearly 30 acres of prime Miami oceanfront real estate. Simultaneously, Michael Dezer is renowned as a zealous car collector, housing a staggering fleet of approximately 1,800 vehicles, many of which are exhibited within his privately owned automotive museum. In contrast, Gil Dezer’s personal collection, totaling 32 cars, is relatively modest. Nonetheless, he wholeheartedly embraced the family business, standing at the intersection of two passionate pursuits: real estate and cars. While the Armani brand may seem a tad unusual in this context, the concept of auto-branded buildings harmonizes seamlessly with Dezer Development’s vision.

The Dezer family has already carved a niche in branded real estate, with Gil Dezer being the first developer to secure a licensing agreement with Donald Trump. This collaboration resulted in the construction of six Trump-branded towers. Notably, Mr. Dezer openly supports the former President, even choosing to hold his wedding ceremony at Mar-a-Lago in 2007. However, the early 2010s marked a change of course for the company when they ventured into a licensing agreement with Porsche, a pioneering move for the company. Mr. Dezer recognized that for the project to thrive, he needed to think beyond conventional boundaries. “Porsche doesn’t exactly correlate with real estate,” he remarked. The Porsche Design Tower, which broke ground in 2014 and welcomed residents in 2017, exudes the same sleek, high-octane masculinity that characterizes the car shows Mr. Dezer frequented as a child with his father. The building itself lacks a dedicated pedestrian entrance. Instead, visitors are greeted by a graphite-hued archway bearing the inscription “Porsche Design” in the iconic Porsche 911 font. Upon arrival, residents can either park and enter the airy lobby adorned with the same bronze, red, and black hues as Porsche’s logo or opt for a more unique experience: driving their vehicles into the building via the patented car elevator known as the “Dezervator.” This innovative elevator, which conveniently deposits cars behind a glass wall in front of each unit, was heralded by Stefan Buescher, the CEO of Porsche Lifestyle Group, as a standout feature. He stated, “It was a natural continuation to transfer our unique design principles to the world of real estate.”

Creating the Porsche Design Tower was a substantial financial investment, with Mr. Dezer allocating $480 million to the project. Of this considerable sum, he estimates that roughly ten percent was dedicated solely to the creation of the Dezervator. Nonetheless, he views this expenditure as entirely justified. Initially, the idea stemmed from the notion of parking a Porsche, Lamborghini, or Bugatti in one’s living room. However, the concept evolved, with buyers increasingly attracted to the privacy that these units offered, circumventing the inconveniences associated with condo living, particularly for prominent individuals. The allure of brand recognition played a pivotal role in attracting buyers like Juan Pablo Verdiquio, a Miami-based real estate developer. In 2017, he acquired a three-bedroom unit in the Porsche Design Tower. His roster of neighbors now includes iconic figures like Lionel Messi, Alicia Keys, and Swizz Beatz.

With a personal penchant for Porsche cars, which extends to his Taycan and his wife’s Panamera Turbo, Mr. Verdiquio viewed this condominium as a symbol of quality in Miami’s competitive real estate market. “There are thousands of new apartments built each year here, so going with a brand I knew felt like a way to preserve the long-term value,” he explained. “From a financial sense, I really liked that it was branded with Porsche.” Carlos Rosso, a luxury Miami developer, observes a growing trend among homebuyers who are increasingly swayed by the logic that brand association elevates the value of their real estate investment. “We are all in the same market for buyers, and we are all trying to differentiate our products,” he noted. “Every residential building needs to tell a story, and branding is a way to not have to explain what a building is all about. You’re associating yourself with a brand that’s already familiar.” As the head of Rosso Development, Mr. Rosso is currently focused on The Standard Residences, Midtown Miami, a 12-story condominium tower that aims to captivate buyers by harnessing the distinctively audacious ambiance of the Standard Hotels. These hotels are perhaps best known for their West Hollywood iteration, where lithe, sun-kissed models lounged in a plexiglass box behind the front desk.

In 2014, Mr. Rosso joined forces with Mr. Dezer on Residences by Armani Casa, a 56-story condominium tower located in close proximity to the Porsche Design Tower. This opulent building, which opened its doors in December 2019, reflects the design sensibilities of the legendary Giorgio Armani himself. From the tapestries and textiles to hand-selected furnishings, every detail exudes an opulent femininity. Muted floral wallpaper, curved furnishings in taupe and gold – it’s a stark contrast to the Porsche Design Tower’s millionaire-meets-man-cave vibe, with its sharp edges and bold primary hues. Turning his focus to the upcoming Bentley Residences Miami, Mr. Dezer anticipates breaking ground later this year on the site of Miami’s Thunderbird Motel, a historic structure from the 1950s that was demolished in June. This 62-story oceanfront building is poised to elevate the luxury experience by featuring four Dezervator elevators, garages capable of accommodating three to four cars, and private outdoor swimming pools attached to each of the 216 units.

Ocean-view residences will also boast outdoor showers. Common areas will include a Macallan Whisky Bar, a restaurant by Todd English, and a cigar lounge. Units are priced between $5.5 million and $35 million, catering to those seeking an exclusive and distinctive living experience. Ian Reisner, Vice President of Dezer Development, emphasizes the unique nature of these offerings. “People are looking for something unique,” he noted. “There’s not a million Porsches up and down the block — there’s only one. Now we’re going to do even better with Bentley.” For serious car collectors desiring to merge their passion for automobiles with luxury housing, Miami presents several alluring options. The Aston Martin Residences, located in downtown Miami, is a prime example. Currently under construction and scheduled for completion by the end of the year, this 391-unit development is nearly entirely sold out. The 66-story tower boasts a distinctive, gleaming curved sail shape, with units starting at $6.5 million and ascending to $59 million for the triplex penthouse, which includes a rare $2.3-million hypercar, the Aston Martin Vulcan.

The development touts itself as “A car made into a skyscraper,” aiming to embody a timeless, James Bond-approved zeitgeist. According to the developer, German Coto, it will be appreciated by those who value a unique luxury lifestyle. This trend is not confined to Miami alone. On Jumeira Bay Island in Dubai, the Bulgari Lighthouse, a 27-story tower with a distinctive undulating facade inspired by coral, is under development by the luxury watchmaker Bulgari. Lamborghini, which previously attempted a branded residential property in Dubai without success, is now making a renewed effort with planned developments in Egypt, Brazil, China, and Spain. Renowned Lebanese fashion designer Elie Saab has lent his design expertise to residences in London and Dubai, while the late Karl Lagerfeld’s iconic design sensibilities are reflected in five villas on Marbella’s Golden Mile. All these developments, according to Clelia Warburg Peters, Managing Partner of Era Ventures, a tech-based real estate venture fund, cater to the wealthy elite and reflect the notion of living in name-brand playgrounds. As the housing market remains competitive, this trend is expected to gain further traction.

“We’re living in a new Gilded Age, and there’s a lot of rich people,” she observed. In the past, prime location was the primary way to differentiate high-end assets. However, with prime locations becoming increasingly limited, developers should not be surprised if more unconventional brands endeavor to carve their niche in the residential real estate arena. “I don’t think anyone wants to live in the Coca-Cola building,” Ms. Peters mused. “But would I be surprised if Restoration Hardware introduced their own line of homes? Absolutely not. This is one of the most significant areas of growth in the real estate industry.”

New York’s Perelman Performing Arts Center: A Beacon of Culture in Lower Manhattan (source: The New York Times)

By Columbus International,14 September 20239 November 2024

The Perelman Performing Arts Center, recently unveiled, stands as one of New York’s most opulent civic structures in years. Its official inauguration is set for Wednesday, and if you’ve been near Lower Manhattan’s World Trade Center over the past year, you likely caught sight of its construction. A floating, translucent marble cube, nestled at the base of One World Trade Center, it stands at a mere eight stories tall amidst a cluster of towering commercial skyscrapers, yet commands attention. This $500 million, 129,000-square-foot endeavor arrives at a time starkly different from its conception two decades ago. Back then, New York was consumed by grief and fear, its economy plummeting, and ground zero remained a somber resting place.

Just this week, we were reminded of the toll as the names of the thousands lost were once again solemnly recited. In the wake of September 11, focus rightly centered on the families of victims, some of whom fervently advocated for the entire 16-acre site to be dedicated as a memorial. Officials grappled with reconciling these pleas with the urgent need for economic and downtown revitalization. Shiny new office towers were heralded as defiant symbols in the face of Osama bin Laden, encircled by new checkpoints and bollards, encompassing the twin memorial pools. Simultaneously, downtown residents and others argued that a response to terrorism — and what the neighborhood needed for revival — was a hub for the arts. “The community that stayed was steadfast in supporting a cultural component,” stated Catherine McVay Hughes, former chairwoman of the area’s Community Board 1, in an interview with The New York Times in 2016. “It was important that something alive gets created here, right here, at the World Trade Center site.” A generation has passed, New York has weathered other crises, and more challenges lie ahead. Perelman debuts in a post-pandemic era, with the theater industry hemorrhaging jobs, and uncertainties about the return to office work, let alone venturing to the World Trade Center for an evening of performance. Ground zero remains incomplete, with significant plots still vacant, and Perelman is just one part of the puzzle — albeit the most prominent, welcoming piece yet, distinct from a shopping mall or a Path train station. And also the most promising. Designed by architect Joshua Ramus, the building is referred to as a “mystery box,” a nod to the three ingeniously engineered, shape-shifting theaters it houses. Small, medium, and large, they’re cloaked in modular acoustic wood panels, resting on robust rubber pads that further muffle the vibrations of subways passing beneath. They can be combined and reconfigured into over 60 layouts, with raked or flat floors, collapsible or extended balconies, movable walls, and adjustable stages.

These high-tech theaters are veiled by a facade composed of thousands of half-inch-thick, intricately veined marble panels, sandwiched between delicate layers of glass. The veining forms lozenge-shaped patterns that span all four sides of the building. After nightfall, when the memorial park across the street empties, and office workers head home, Perelman illuminates like a lantern. Its white stone transforms to amber. Chandeliers in the towering corridor along the center’s curtain wall cast the silhouettes of bustling theatergoers onto the radiant marble, beckoning the neighborhood back to life. Lower Manhattan didn’t succumb, it thrived after September 11, with its residential population tripling. However, the World Trade Center has remained an unfamiliar zone. An arts institution was among the early casualties of the chaos. Frank Gehry was initially commissioned to design it, but was subsequently replaced. Tenants came and went. The Port Authority imposed the Oculus, a flamboyant, extravagant showcase building by Santiago Calatrava, to house the Path station and shopping mall. As time passed, dreams of an arts center gradually faded from memory. Yet, they never vanished.

In 2015, Ramus’s marble cube emerged victorious in an international design competition held to reinvigorate the project. The following year, cosmetics mogul Ronald O. Perelman donated $75 million to bolster funding. Ramus, now 54, had previously overseen the design of Seattle’s Central Library, one of the standout buildings of the early 21st century. At the time, he was a partner with Rem Koolhaas, co-owning their New York office. The partners eventually separated, with Ramus taking over the firm and rebranding it as Rex. Seattle’s library evidently served as a precedent for Perelman, marked by a similar obsession with rationalism and its vertiginous, adaptable interiors. It’s likely that Ramus and his team also visited the splendid Chiesa di Nostra Signora della Misericordia in Milan from the 1950s, renowned for its matte glass exterior. Another clear influence is Gordon Bunshaft’s Beinecke Rare Book & Manuscript Library at Yale, not only for its translucent marble but also for its sepulchral atmosphere. In Perelman’s case, the structural challenge was building it atop four underground stories of intricate, immovable infrastructure — a labyrinth of train tracks, ventilation ducts, and truck ramps that service the World Trade Center site. The first 21 feet above the sidewalk also fell under the jurisdiction of the Port Authority, for both practical and security reasons. Ramus collaborated with Davis Brody Bond, a seasoned New York architecture firm, and Jay Taylor, a senior principal at Magnusson Klemencic Associates, the engineering firm that worked on the original Twin Towers. Amidst the tracks and ramps, they identified distant load-bearing points in the bedrock to support a system of belt trusses, which cradle the theaters. Yielding the Port Authority its 21 feet, they elevated Perelman onto a plinth of black granite, concealing an entry stair below the south wall. The cantilevered corner of the building lifts enticingly from the sidewalk, akin to a pleated skirt. This stairway serves as the closest thing the World Trade Center has to a public stoop for gathering, which it sorely needs. Hopefully, security won’t shoo away those who choose to sit on the steps. Visitors who opt for the stairs arrive at a lobby on the building’s lower level, serving as its warm, inviting heart.

Designed by the Rockwell Group, the sculptured ceiling is adorned with lights nestled into spirals of wooden ribs. This floor of the building will be accessible to the public from morning until late at night, featuring a stage, lounge, and a restaurant by Marcus Samuelsson. Additionally, a terrace provides a vantage point akin to that of the High Line, offering a view of Lower Manhattan. Exquisitely crafted, Perelman ultimately exceeded its initial budget twofold — a sum that could have supported numerous existing community arts organizations throughout the city for countless years. The majority of the funding was privately donated, with Michael Bloomberg providing the largest contribution at $130 million. New Yorkers may recall that during his tenure as mayor, he advocated for housing and schools to be included alongside offices and a smaller memorial at the World Trade Center, though his proposal was met with resistance.

Photo via Pac NYC

In the Last Decade, Tech Titans Redefine Manhattan Real Estate Landscape: Google’s Bold Moves Leading the Way

By Columbus International,13 September 2023

In the past ten years, Google has taken massive strides in the Manhattan real estate sector, acquiring both the iconic Chelsea Market and the sprawling New York headquarters. The tech giant continued its expansion shortly after the pandemic with a historic $2.1 billion investment in the St. John’s Terminal construction project, marking the largest real estate transaction in the United States since the pandemic’s onset. This surge in real estate acquisition is not exclusive to Google alone. Amazon, Microsoft, Apple, Facebook, and Salesforce have also established their campuses on Manhattan’s West Side. This trend underscores how technology companies are rapidly overshadowing their counterparts in the banking and finance sectors, emerging as the dominant industry in the city post-pandemic.

These tech giants not only lead in employment growth but also dominate in terms of the number of companies. Twenty years ago, Tim Armstrong, now 50, became Google’s first New York-based employee. Reflecting on those early days, Armstrong remarked, “If you were hosting a cocktail party for everyone working on the internet in New York, you could have fit them all in a bar. Now, I imagine you’d have to take over Madison Square Garden and the Javits Center to accommodate everyone.” Data provided by the New York State Comptroller’s Office, as reported by Forbes, paints a vivid picture of this transformation. In 2020, the number of tech companies in the city exceeded 10,000, more than double the count from two decades prior, and nearly double the number of securities companies.

Tech employment has similarly grown, from 108,000 in 2000 to 167,000 in 2020, while the number of securities employees decreased from 190,000 to 176,000 during the same period. The tech industry’s dominance in Manhattan is evident in both overt and subtle ways. For instance, the Salesforce logo now adorns 1095 Sixth Avenue, replacing the previous MetLife sign near Bryant Park. Meanwhile, bank offices have quietly retreated. Since the aftermath of the 2008 financial crisis, the five largest U.S. banks by total assets—JPMorgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs—collectively relinquished nearly 5.5 million square feet of office space in Manhattan, according to data provided by Real Capital Analytics. During the same period, just two tech firms—Google and Amazon—acquired approximately 6.5 million square feet of office space. Additionally, Apple, Microsoft, and Facebook secured leases covering millions of square feet across the city. In the midst of the pandemic, Facebook expanded its Manhattan footprint to 2.2 million square feet by leasing 730,000 square feet at the Farley Post Office building in Midtown. Apple also signed a 220,000-square-foot lease nearby at 11 Penn Plaza. Microsoft, on the other hand, holds an additional 200,000 square feet of leased space at 11 Times Square and was recently in negotiations to secure another 100,000 square feet at an undisclosed building in the Flatiron District.

Darcy Stacom, a commercial broker who represented Google in its real estate acquisitions, commented, “The city was always considered a financial services city, and now it’s seen as a financial services and tech city. It has never been said before in my career.” With over four decades of experience in New York City real estate, Stacom believes that this recent surge could position the tech industry to surpass finance as the largest occupier of commercial real estate in New York by the end of the decade. Google asserts that it is strengthening its presence in New York because of the city’s abundant talent pool, a rationale echoed by Amazon, Facebook, and Microsoft. In 2021, in the midst of the pandemic, Google announced its intention to hire an additional 2,000 people in the city, expanding its local workforce to 14,000 individuals, with a focus on sales and marketing personnel at its new property. William Floyd, Google’s head of public policy and government affairs, affirmed, “With concerns about whether New York would bounce back, we thought this would be the perfect illustration of our corporate commitment to New York. In New York, tech is not only an industry but also a vital part of the city’s other industries.”