Midtown Manhattan Landlords Strike Gold With Bloomberg Expansion

Bloomberg LP's continued investment in Midtown Manhattan, New York, is benefiting the city's largest commercial landlords.

Real estate investment trust (REIT) SL Green Realty Corp. SLG, which owns 919 Third Ave., received a welcome surprise when Bloomberg renewed and expanded its lease for a substantial 924,876 square feet. The expansion, first reported by The New York Post, is a testament to the media giant's commitment to the neighborhood.

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SL Green, Manhattan's largest office landlord, has also recently signed leases with hedge fund Verition Group NY Inc. for 72,515 square feet at 245 Park Ave. and law firm Kauff McGuire & Margolis, which took 17,320 square feet at 810 Seventh Ave.

SL Green, which has a market cap of $5.02 billion, pays an annual dividend of $3 per share.

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Another REIT, Vornado Realty Trust VNO, has benefited from Bloomberg's growth as well. The company extended its lease at 731 Lexington Ave. to 2040. To secure the deal, Vornado CEO Steve Roth reportedly offered a significant incentive package, including $300 million in capital improvements and free rent, according to Crain's.

Vornado is set for a strong finish to the year, with New York University poised to master lease the entire 1.1 million square feet of office space at 770 Broadway, the future home of Wegmans. Roth confirmed the deal during an investor call.

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According to the New York Real Estate Journal, Vornado also recently announced a new lease with Five Iron Golf for a location at 1290 Avenue of the Americas, a 2.1 million-square-foot office building it owns in Midtown. 

Vornado has a market cap of $6 billion, an EPS of $1.70 and an annual dividend yield of $1.12 per share.

Five Iron Golf will be a key part of Vornado's new amenity program at the building. The facility will offer golf simulators, instruction, a restaurant and a bar. It is designed to cater to both tenants and the local community.

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While not every building owner has been as fortunate, the Manhattan office leasing market shows surprising resilience, especially considering recent challenges. The uptick could further accelerate as interest rates continue to decline.

Manhattan's office leasing market is showing signs of recovery. According to CBRE, the overall availability rate for October was 17.2%, the lowest since March 2021. Leasing activity has reached 1.73 million square feet, surpassing the five-year monthly average by 57%.

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