Big NYC office tenants quietly shrink square footage in ‘major reset’

Some large new Manhattan office-lease signings this year seemed to bode well for the pandemic-battered commercial market. IBM at One Madison Avenue! Tiffany at 200 Fifth Avenue! HSBC at The Spiral aka 66 Hudson Blvd. — for a combined total of about 900,000 square feet at high rents in high-profile new or redesigned buildings.

But there’s a shadow over the deals as well. All of them were for much less space than the companies had previously, a trend that Wharton Property Advisors president Ruth Colp-Haber views as portending a “major macroeconomic reset” looming in the office market.

Even as JP Morgan Chase’s new, supertall headquarters tower rises at 270 Park Ave., the bank chopped its Manhattan footprint by 400,000 square feet in 2021 following a 300,000 square-foot haircut in 2020. CEO Jamie Dimon has suggested that more “consolidation” is in the cards.
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RSK: Doesn`t bode well for the office sector however, if some of these offices are retrofitted, they may lease up at a rate that will cover the improvements over 5 years.