May 2025 Newsletter

Midtown Office Market in Real Time | 

Built School Space with CO | Click for Details

💸 Mid-Block Manhattan Is Resetting… and Clearing

In the Garment District, pre-war mid-block office buildings are continuing to trade (for sale) in the $180-$300 PSF range depending on exact location, condition and how much base building needs to get done with office rents ranging from $30-45 PSF. Some owners are keeping the building's as offices, investing in modest upgrades to attract value-seeking tenants. Others are flipping the use entirely and going residential, especially if the floorplates and light lines work. Either way: the bid-ask spread is narrowing and the product is moving.

🤝 Flex-Space Consolidates—but Pricing Is Up

We’re seeing fewer operators, but stronger ones, and they’re commanding more. As the flex-space market tightens, pricing is rising, especially for smaller <10 person teams. Some coworking deals are moving at lightning speed (we closed one same-day this spring), which speaks to the operational efficiency tenants now demand and the providers still in the game are absorbing demand at higher margins.

🚆 Hot Pockets: Grand Central’s Quiet Heat

The Grand Central submarket is quietly red-hot. Occupancy is well above 90% in most buildings, and if you find a building that isn’t, it’s probably a sign to stay away. Location, proximity to transit, and in-place tenant stability are creating a small scale flight-to-convenience for tenants.

💥 The Bailouts Are Here—If You Held On

This month, the thesis became reality: owners who held on are finally getting saved. Either through:

• Recaps/Refis (like most of the RFR Realty portfolio),

• Sales (522 Fifth, 452 Fifth, 320 Park, 1345 AofA partial stake)

Capital is flowing again, but only into assets where pricing & potential finally align.

💡 Final Take

Midtown’s recovery isn’t headline-grabbing—but it’s happening. The key isn’t optimism. It’s math. When the basis resets and the rent rolls reflect reality, deals clear. And that’s exactly what we’re seeing.

Until next month,
Ben

Ben Blumenthal
Principal Broker | Noah & Co.

For the rest of our May 2025 Newsletter, click here.