Morgan, Lewis & Bockius Signs 205,000-Square-Foot Lease at Hines-Managed 1251 Sixth Ave. in Midtown Manhattan

Law firm Morgan, Lewis & Bockius has signed a 205,000-square-foot office lease at 1251 Sixth Ave. in Midtown Manhattan, a Hines-managed tower, according to Colliers' latest Manhattan office market report. The deal was among the highlights of a historically busy third quarter for the borough's office market.

Morgan, Lewis & Bockius Relocation to 1251 Sixth Ave.

The firm's New York office is currently at 101 Park Ave. The timing of its move to 1251 Sixth Ave. has not been announced.

The tower, also known as 1251 Avenue of the Americas, is a 54-story, approximately 2.36-million-square-foot office building in the Rockefeller Center area, between West 49th and West 50th streets. Mitsui Fudosan America owns the property, and Hines manages it. Newmark was reported as the exclusive leasing agent.

Other tenants at the building include Solomon Partners, which signed a 70,000-square-foot, 15-year lease in 2023, as well as Lowenstein Sandler, Akerman, Berenberg Capital Markets, TWC Group and Sullivan & Worcester.

Where the Lease Ranks Among Third-Quarter Deals

The largest new office lease of the third quarter was artificial intelligence company Anthropic's lease of the entire building at 330 Hudson St., roughly 465,600 square feet. The only larger lease overall was law firm Proskauer Rose's approximately 478,000-square-foot renewal and expansion at 11 Times Square.

Midtown's largest leases included the Proskauer Rose and Morgan, Lewis & Bockius deals, along with NBCUniversal Media's 244,000-square-foot renewal at 1221 Sixth Ave. and General Atlantic's new lease for 152,000 square feet at 625 Madison Ave.

Manhattan Office Market Posts Strongest Third Quarter Since 2018

Companies leased more than 10 million square feet of office space in Manhattan during the third quarter, 16.2% above the five-year quarterly average and 19.2% above the 10-year quarterly average, according to Colliers. It was the best third quarter recorded in Manhattan since 2018 and kept the market on pace for its best yearly leasing volume since 2000.

"The Manhattan office market's recovery continued at a rapid pace throughout the summer and into the early days of autumn," Franklin Wallach, executive managing director of research & business development for Colliers in New York, said in a statement. "As we enter the final quarter of the year, the market is beginning a new chapter after achieving several critical recovery milestones in Q3. Notably, Class A pricing reached a new high, Midtown became the first major Manhattan market to return to its pre-pandemic level of availability and Midtown South recorded the strongest third quarter of activity on record."

Manhattan's average asking rent rose to $78.36 per square foot, up 0.4% from the previous quarter and the highest since July 2020. Availability in the borough fell to 12.4%, the 10th consecutive quarter it declined or stayed flat.

Midtown, Midtown South and Downtown Submarkets

In Midtown, companies leased about 4.5 million square feet during the quarter, up 2.3% from the prior quarter and 5.3% from the prior year. The submarket's average asking rent was $85.08 per square foot, its highest since August 2020. Availability dropped to 11.9%, and the roughly 27.7 million square feet of available supply is in line with levels before the pandemic.

Midtown South recorded about 4.8 million square feet of leasing, a 5.9% decline from the previous quarter but a 10.7% increase from the previous year. Its largest leases included the Anthropic deal, Havas Health Network's approximately 254,100-square-foot extension and expansion at 200 Madison Ave. and Snap Inc.'s 199,000-square-foot new sublease at Penn 2. The submarket's average asking rent was $79.57 per square foot, and availability declined to 11.6%. Its roughly 21.9 million square feet of available supply was the tightest since October 2020.

Downtown activity was slower, with companies leasing 850,000 square feet, a 47.2% drop from the previous quarter and a 5.5% decline from the prior year. The area's largest lease was insurance broker Aon's 202,000-square-foot renewal at 1 Liberty Plaza. Lower Manhattan's average asking rent rose for the eighth consecutive quarter to $64.88 per square foot, the highest since July 2020. Availability dropped to 15.2%, with approximately 15.1 million square feet of available supply.

Market Outlook

Manhattan's availability rate has declined or held flat for 10 consecutive quarters, and asking rents have climbed to levels not seen since mid-2020. The Morgan, Lewis & Bockius lease adds to a pipeline of large law firm and corporate deals that has kept the market on pace for its strongest annual leasing volume since 2000.

Sources

• https://sjpproperties.com/news/law-firms-205k-square-foot-office-lease-helps-drive-manhattans-historic-third-quarter/