|
Getting your Trinity Audio player ready...
|
By: Rob Otto
In an exclusive report from the New York Post, it has been revealed that George Comfort & Sons’ Midtown office tower at 498 Seventh Avenue has reached a remarkable 95% occupancy, thanks to two significant lease deals totaling 104,000 square feet. Despite some older buildings in New York City struggling to attract tenants, this 960,000 square-foot property has managed to thrive. The 25-story tower, originally opened in 1920, was substantially modernized in 2021 to meet the needs of modern businesses.
One of the key deals involves PubMatic, Inc., a public technology firm that has signed a 60,000 square-foot direct lease. Previously a subtenant, PubMatic will nearly double its space in the first quarter of 2025. This expansion signifies the company’s growth and its commitment to maintaining a significant presence in the city.
Additionally, engineering firm Hazen and Sawyer has extended its lease on 44,000 square feet of office space until at least 2035. These new agreements underscore the building’s appeal to businesses seeking prime locations in the heart of New York City.
According to George Comfort & Sons CEO Peter S. Duncan, the building’s success can be attributed to its “light-filled workspaces, flexible floorplates, convenient amenities, and unmatched location at the center of the city’s most important transit hubs.” The strategic location and modern amenities have made 498 Seventh Avenue a desirable address for companies looking to establish or expand their operations in Manhattan.
The tower underwent significant renovations in 2021, with design firm Gensler revitalizing the ground floor’s through-block lobby and other key areas. These updates have enhanced the building’s appeal, offering tenants a modern and welcoming environment. Asking rents at 498 Seventh Avenue are in the $60s per square foot, according to market sources. Other tenants in the building include engineering firm Cosentini Associates, construction specialists Milrose Consultants, design firm Dattner Architects, and construction firm The McKissack Group.
The leases were negotiated by Matt Coudert and Andrew Conrad, who represented George Comfort in-house. PubMatic was represented by Greg Taubin of Savills, while Curtis Dean of CD Commercial Real Estate Services represented Hazen and Sawyer.
While 498 Seventh Avenue is thriving, other Midtown office buildings face challenges, particularly those with outdated features. The work-from-home trend, which has been blamed for various issues in Manhattan’s commercial market, has also contributed to the declining appeal of certain properties. For instance, a New York Times article highlighted the $8.5 million “fire sale” of 135 W. 50th St., a building that traded for $332 million in 2006. Developer David Sturner noted that “most buildings are no longer considered safe investments,” due in part to work-from-home practices and changing market dynamics.
According to the report, 135 W. 50th St. suffers from outdated layouts, insufficient natural light, low ceilings, and a burdensome ground lease, leading to a 35% occupancy rate. These issues reflect a broader trend where companies are moving out of buildings that no longer meet their needs or provide a desirable working environment.
Despite these challenges, the work-from-home trend appears to be gradually waning. The Real Estate Board of New York’s latest survey, based on Placer.ai location data, shows that 350 Manhattan buildings have registered 77% of the pre-pandemic physical occupancy baseline relative to 2019. This marks the highest monthly level since the Real Estate Board of New York began tracking it in February 2023.
