By Patrick Hedlund
That empty feeling
Office vacancy rates have always acted as a bellwether for the commercial real estate market, so its not surprising that the citys year-end tallies reflect the sting of the current recession.
The overall vacancy rate for Midtown and Downtown sat at about 8 percent to close out 2008, according to the fourth-quarter report from brokerage Cushman and Wakefield. Lower Manhattan showed a 7.4 percent vacancy rate compared to Midtowns 8.5 percent rate, while Midtown South, which extends from Chelsea to Soho, fared better overall, posting a 7.1 percent rate.
Lower Manhattans Financial West submarket registered the highest vacancy rate 12.5 percent in the area, while the World Financial submarket clocked in at 10.5 percent. The Financial East submarket posted a 7.4 percent vacancy rate, City Hall sat at 5.1 percent, and the Insurance submarket enjoyed a 4.7 percent rate.
The year-end figure represents a 32.1 percent increase in Lower Manhattans available space over last years record lows, and leasing activity in the area dropped by 23.4 percent in 2008 and 36.4 percent compared to 2006.
Midtown Souths Hudson Square/West Village submarket saw the highest vacancy rate of any neighborhood citywide in the fourth quarter, at 16.2 percent, while Soho had just 4.5 percent of its office stock unoccupied.
Midtown Souths overall figure climbed 2.4 percent from 2007, and the area remains the tightest market in Manhattan as the vacancy rate is at the bottom of equilibrium. The report also stated that the market recorded one of the weakest years of leasing activity since 1992.
However, the Midtown Souths asking rents continued to increase jumping 15.4 percent year-over-year, to $54.09 per square foot due to lack of inventory and relatively constant demand from tenants looking at alternatives to the high rents in Midtown.
North Tribeca cachet
One of the newest luxury residential buildings to open in North Tribeca, the nine-story Fairchild at Washington and Vestry Sts., will be giving other area developments a run for their heaping piles of money. Located across the street from the Justin Timberlake-inhabited Pearline Soap Factory and a block from the enigmatic upscale rental Truffles project, the Fairchild features 21 David Howell-designed simplex, duplex and triplex units, many boasting 22-foot-high ceilings.
Prices range from $1.965 million to $8.995 million for the two-, three- and four-bedroom residences spanning from 1,350 to 3,500 square feet, including three oversized triplex townhouses with private street-level entrances. The buildings publicist excitedly informed that the offerings were enough to get Sopranos star James Gandolfini to peruse some floor plans, who could theoretically combine units to create a 10,000-square-foot custom residence for him and his famiglia.
The building features a red-brick design in line with the industrial character of North Tribeca, as well as oversized arched windows, and the city Landmarks Preservation Commission supervised the construction process.
The Fairchild is also, unsurprisingly, stacked with amenities, including direct elevator access to each unit, stained hardwood walnut flooring, and Sub-Zero refrigerators and wine coolers. Act now before the celebs do, as theyll likely come running to join the growing roster of Tribecas A-listers slowly taking over the neighborhood.
The foundering economy has forced one restaurant company to close one of its upscale eateries in Soho. Fiamma, the critically acclaimed Italian restaurant on Spring St., shuttered last week and will be converted into an event space, said owner Stephen Hanson. Hanson also announced the closures of restaurants in the Meatpacking District and Upper West Side and another in Chicago as part of the move in the face of tightening times across almost every industry.
Hansons company, B.R. Guest Restaurants, operates more than 15 dining establishments in New York, Chicago and Las Vegas. But the six-year-old Fiamma, which earned a three-star review from The New York Times less than a year ago, represented one of Hansons most celebrated ventures.
The end of the partnership between B.R. Guest and [Fiamma] Chef Fabio Trabocchi is an amicable one, as the current economic climate does not support such an upscale operation like Fiamma, a company statement read.
The restaurants three-floor Spring St. townhouse will now serve private functions, featuring menus from existing B.R. Guest restaurants.
An established improv comedy club plans to open an outpost in the East Village in the space formerly occupied by the Pioneer Theater.
The Upright Citizens Brigade, currently with locations in Chelsea and Hollywood, got the advisory approval of Community Board 3s S.L.A. Licensing Committee last week in its bid to obtain a liquor license for 155 E. Third St., just off Avenue A.
The space was previously home to the Two Boots Pioneer Theater, local impresario Phil Hartmans single-screen, independent movie house that, after a decade of operation, was forced to close in November due to rising rents.
The committee greeted U.C.B.s application with relatively open arms for an area already saturated with nightlife establishments, and local advocates also responded positively to the news.
In a neighborhood losing its performance spaces, U.C.B. will serve the E.V. by preserving the Pioneer space as a theater, Rob Hollander of Lower East Side Residents for Responsible Development wrote in an e-mail while simultaneously questioning whether U.C.B.s mainstream affiliation would bode well for the fringe-artsy neighborhood. Entertainment thrives in a depression economy, especially affordable entertainment, and U.C.B. shows, when not free, are only $5. Comedy, by nature subversive when not merely infantile, may hope to match a strand in the older East Village crazy fabric.
Hartman himself seemed heartened by the move, which will keep his former theater space intact.
Im so attached to the physical space of the theater, so the thought that it was going to get gutted and turned into some clothing boutique was sad, said Hartman, who also operates the Two Boots chain of pizzerias throughout the city. I think its fantastic, and I really hope it works out.