SOURCE: Yoram Eliyahu Realtor
NEW YORK, NY--(Marketwire - Oct 10, 2012) - The New York Times reports that a once struggling Bryant Park is now the leader in commercial office space in Midtown Manhattan. With extremely low vacancy rates and equally high rental fees, Bryant Park has transformed from an "enclave of unsavory characters and menacing panhandlers" into an "urban oasis where office workers lunch and city dwellers gather to watch outdoor films." Yoram Eliyahu, a commercial real estate professional, explains how such a metamorphosis was able to take shape.
The article asserts that the 13 buildings in the vicinity of Bryant Park had a 3.8 percent vacancy rate at the end of the second quarter of 2012. Midtown's vacancy rate was measured at 11.5 percent. Likewise, the rental rates for the two areas were significantly different: Bryant Park asked $78.29 per square foot while Midtown asked $63.40 per square foot.
Jones Lang LaSalle, the commercial real estate brokerage that calculated the previous statistics, asserts that Brant Park first began to redefine itself in 2003. This transformation coincides with the building of One Bryant Park, which is a large office tower that houses Bank of America. After construction on One Bryant Park was complete, other high rise buildings underwent renovations. As such, the entire area converted from an older, seemingly run-down locale to one renowned for its high-end office space. And the renovations are still in full swing.
Although the transformation, when put into such terms, may seem simple, Yoram Eliyahu agrees with the article in that it required a "drastic shift in thinking for New York's commercial real estate world." Mary Ann Tighe, who is the Chief Executive of commercial brokerage firm CBRE Group, explains that 42nd Street is a prominent divider between top of the line office buildings and less desirable commercial addresses. Because Bryant Park is adjacent to 42nd Street, Tighe asserts that the office spaces within the area have been discounted because they fell on the "less desirable" side of the division. But this changed when real estate professionals recognized the new image of Bryant Park.
"Transforming a commercial real estate area is not easy," Yoram Eliyahu explains. "First, the owners of the properties must put in the time and capital to renovate and update their buildings. This kind of investment can be major, depending upon the work that needs to be done. Then tenants must see the improvements and be willing to lease space in the newly redesigned buildings. Finally, the real estate community has to recognize the fact that the area is changing -- a decision that can throw a wrench in traditional real estate practices. Bryant Park is a wonderful example of what can happen if all of these factors fall into place."
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