Crain's New York reports:
Park Avenue has long been one of the city's most coveted and expensive office districts and the neighborhood of choice for deep-pocketed corporations and high-end investment firms.Square footage is square footage.
But a series of upcoming departures by some of the avenue's largest office occupants could leave landlords with millions of square feet to fill.
Citibank and Major League Baseball are moving, and investment firm BlackRock is weighing an exit in the coming years. Those moves and several others could leave over 2 million square feet vacant. That's almost 10% of Park Avenue's office market, which spans East 45th to East 59th streets.
Landlords argue that many of the vacancies are years away, giving them time to lease the spaces and undertake renovations that will make their buildings more attractive to prospective tenants.
But the departures also signal how the city's changing office market has created challenges even for Manhattan's quintessential corporate stretch. The neighborhood's tenant base has contracted, and the area, which charges the city's highest rents on average, has been slow to transition into an appealing destination for fast-growing industries like tech.
"We've always looked at Park Avenue as the No. 1 location for office space in all of Manhattan," said Mary Ann Tighe, CEO of CBRE's New York office. "But what you're seeing is a migration to newer product. The age of these buildings is catching up to them."
Park Avenue office towers are, on average, 55.6 years old, according to Cushman & Wakefield, and many have low ceilings and prodigious structural columns. New towers have open spaces with ample light and air.