Manhattan’s Q1 2022 office vacancy rate stood at a record 22%. Yet, newly released data show that one major commercial corridor, under-sung Midtown Sixth Avenue, weathered the pandemic with a vacancy rate of between 12.6% (according to CBRE) and 14.6% (as per Cushman & Wakefield). How did this happen?
Simply, the threat of large-scale corporate exodus 10 years ago prompted landlords to invest in making mid-20th-century towers relevant again. The strategy didn’t succeed everywhere. A perfectly sound building nearby, 1740 Broadway, remains empty after a renovation, prompting owner Blackstone Group to place the mortgage with a special servicer.
But Sixth Avenue – wider, straighter and airier than Midtown Broadway – is a better corporate environment. Much less space is available on a percentage basis in the Sixth Avenue/Rockefeller Center office market’s 42m sq ft than in any comparable-sized Manhattan subdistrict, including Park Avenue. The wall-like procession of 50-storey office towers along Sixth Avenue’s western side stands as an iconic image of Manhattan corporate and financial power.
Between West 40th Street and Central Park South can be found financial firms Morgan Stanley, UBS, Marsh McLennan, Bank of America and Bank of Tokyo Mitsubishi. Law firms include Latham & Watkins, Paul Weiss and White & Case. Professional sports are represented by Major League Baseball. Media and entertainment users include News Corporation, NBC Universal and CBS. Salesforce and Global Relay USA stand for the tech world.
Sixth Avenue feels more like high-energy, pre-Covid New York than anywhere else
Some deals were recently signed at triple-digit rents. Long-term leases at any price mean long-term stability for landlords and for the avenue’s overall health.
I’ve followed Sixth Avenue’s rollercoaster fortunes since the New York Post moved there in 1995. Less than 10 years ago, it faced a potential 25% vacancy rate as companies moved to more efficient, fancier digs on the Far West Side and Downtown. Today, Sixth Avenue feels more like high-energy, pre-pandemic Manhattan than anywhere else. Streets and sidewalks are teeming. Physical office occupancy has steadily inched upward. Sixth Avenue even snatched the Macy’s Thanksgiving Day Parade from Broadway six years ago.
When Greek seafood restaurant Avra opens in June at Rockefeller Group’s 1271 Sixth Ave, it will be the largest restaurant to front directly on to any Midtown avenue. The three-level, 100ft-long facade on the tower’s plaza symbolises the avenue’s transformation from a once-drab office corridor to a visitor-friendly place that no longer shuts at 5pm and on weekends.
The Durst Organization’s One Bryant Park/Bank of America Building at the corner of West 42nd Street, which opened in 2016, is the only skyscraper new from the ground up. But most of its neighbours overcame their mid-20th-century limitations thanks to billions of dollars in improvements by landlords.
Rockefeller Group made 1251 Sixth, the former Time + Life Building, virtually new with a $600m (£474.2m) redesign. It’s now fully let since the publisher moved away. Brookfield similarly transformed gloomy 1100 Sixth into a gleaming, glass jewel box. Other properties have more than just new lobbies, public plazas and art installations. They boast environmental features attuned to pandemic-era concerns; new outdoor spaces for tenants and amenities such as private dining rooms and health clubs.
The four-mile boulevard originates in a confusing tangle of streets in Tribeca. It traverses colourful, lower-rise Soho, Greenwich Village, the Ladies’ Mile district, the pre-war structures of Midtown South and the Herald Square shopping nexus. It passes beautiful Bryant Park before surging north to Central Park’s southern edge.
Yet, while songs and movies have been named for Fifth Avenue, Park Avenue and Broadway, no such public glory has yet come to Sixth Avenue. Nor is it identified with particular industries, such as advertising for Madison Avenue or apparel-making for Seventh Avenue, associations that linger even though those industries moved elsewhere decades ago. But Sixth Avenue’s commercial strength, hopefully a harbinger of Manhattan’s future, tops them all.
Steve Cuozzo is real estate correspondent for the New York Post