Mamdani can’t slow hot commercial market
What a week it was!
Manhattan saw three major actions that gave confidence in the commercial market no matter what “socialist” fantasies Mayor Zohran Mamdani throws at it.
Most visibly, ground was broken for the new Amex tower at Two World Trade Center — portending the guaranteed if belated completion of the whole WTC site.
Meanwhile, full-scale demolition began for 350 Park Ave. the 1,414 foot-tall skyscraper developed by Vornado, Rudin and Ken Griffin.
And, also remarkably, Airbnb bought 281 Park Ave. South for $81.5 million.
The three situations reflect a commercial economy stronger than any impediments, delays or political resistance.
The saga of 2 WTC is too well known. The start of construction by Silverstein Properties, which is building the tower for Amex, caps a two-decades struggle to create an all-new World Trade Center, which many elected officials and most of the media opposed for years after 9/11.
After the success of the other new towers finally made the obstructionists back off, Larry Silverstein, who’s now 96, had to start over when two potential anchor tenants backed out. The Amex deal is a personal triumph for him in the face of political and bureaucratic resistance and bad luck.
The groundbreaking ceremony drew not only executives of Amex, Silverstein and the Port Authority, but even Mamdani, who wielded a shovel with the others. The mayor weighed in with rare praise for a private-sector project, saying, “I am proud to welcome American Express’s new global headquarters to Lower Manhattan. This is not just a sign of confidence in the future of our city — it is an investment in thousands of good jobs, the local economy, sustainability and the final piece of the rebuilt World Trade Center.”
Wow!
In Midtown, demolition for 350 Park Ave. strongly suggests Griffin means to go ahead with his nearly 1 million square-foot lease commitment for two of his Citadel companies at the project, despite his justified fury at Mamdani for dissing him over his $238 million apartment.
Vornado and Rudin wouldn’t likely be taking down three entire buildings on Park Avenue and East 51st and East 52nd streets if they feared Griffin, who is a partner in the project with them, would change his mind about occupying half of the 1414-feet tall skyscraper.
The Airbnb purchase similarly reflects that corporate priorities can trump a malicious political climate.
Mandani and Democratic congressional nominee Brad Lander are openly critical of Airbnb — but it started with the Eric Adams administration, which specifically targeted Airbnb with regulations to limit short-term stays.
The deal to buy 281 Park Ave. rescues the beautiful property from what could have been years of vacancy. The building originally owned by a Protestant church organization was sold to Aby Rosen’s RFR in 2014, which leased it to Sweden’s Fotografiska museum from 2019-2024.
Rosen, who got 63% more on the sale to Airbnb than he paid for it, commented, “Great buildings reward great stewardship. We bought 281 Park Ave. South because it’s a masterpiece, restored it with the care a landmark deserves, and this outcome is the result.”
But while there’s no question the Manhattan office market is roaring, certain metrics can be perplexing.
Case in point: JLL’s just-released second-quarter survey cites overall vacancy of 13.5% — which was roughly in the same ballpark as CBRE’s tally of 14.4%, Newmark’s 14.3%, Colliers’ 13.4% and CoStar’s 13%.
But Cushman & Wakefield said overall Manhattan vacancy was 19.3%. While that was substantially lower than the brokerage’s estimate of 22.6% one year ago and 23.8% in 2024, what accounted for the firm’s much higher availability estimate than those of its competitors and of CoStar?
Cushman’s vice-president for US corporate communications Garrett Derderian explained to Realty Check, “We keep the leased availability in our statistics until the tenant is presumed to physically occupy the space.”
He said, “It’s the most accurate way to calculate absorption which is why we use this methodology. So when the tenant occupies the space we delete the leased availability so it is not double-counted.”
But did the same rule apply in cased where a tenant was paying rent at both locations?
“It has nothing to do with rent, we don’t track that information,” Derderian said. “It’s just so the occupancy is not double-counted.”
