WeWork Leases at 575 Lexington Ave. Reflecting Co-Working Trend
The alternative office space provider will occupy five floors in the Midtown office tower as flexible space continues to be the Manhattan office market story.
NEW YORK CITY—WeWork continues to grow, signing a lease for 117,000 rentable square feet at 575 Lexington Ave., located between E. 51st and E. 52nd streets. Built in 1958, the skyscraper is owned by a joint venture of Angelo Gordon & Co, Normandy Real Estate Partners and George Comfort & Sons. Just this last summer, the owners received $415 million in refinancing secured by the building.
“Given the incredible demand we’re seeing from companies wishing to join the WeWork community, we are constantly looking to expand our footprint in New York City,” says Granit Gjonbalaj, chief development officer at WeWork. “Located in the heart of Manhattan, where we recently became the largest private occupier of office space, 575 Lexington Ave. is a great addition to our portfolio and will allow us to better serve our fast growing community of over 50,000 members in the city.”
WeWork’s leases 5.3 million square feet of office space in Manhattan.
A company spokesperson tells GlobeSt.com that the co-working office space provider will occupy five floors, the 12th and the 14th through 17th floors, during the first half of 2019. Additional information was not disclosed.
In addition, WeWork recently launched its HQ by WeWork program of office spaces marketed to mid-sized companies. For this product and service line, WeWork recently signed two Manhattan leases. One was for five floors, the second through the sixth at 130 Madison Ave., totaling slightly more than 11,000 square feet. The second lease was at 483 Broadway for approximately 10,000 square feet spanning the second and third floors. WeWork members will move into both locations during Q1 2019.
Just last week, the flexible office space provider Knotel signed an 11,940 square-foot lease for the entire fifth floor at 80-90 Eighth Ave., between 14th and 15th streets in Chelsea. Newmark Knight Frank brokers handled the deal with Michael Morris and Greg GiGioia representing Knotel and Morgan Feldman and Scott Brown, representing the landlord, Newmark Family Properties.
At the same time, Knotel also announced it inked a deal for 10,400 square feet, the full fourth and fifth floors at 155 Fifth Ave., between W. 21st and W. 22nd streets in the Flatiron District. Built in 1893, the seven-story Beaux Arts structure is known as the Scribner Building because it once housed the headquarters of the publishing company, Charles Scribner’s Sons.
“Our growth in New York City shows no sign of slowing down,” says Eugene Lee, global head of real estate & business development at Knotel. “Alongside many of our other recent partnerships with some of the city’s top landlords, these locations reflect our expansion in Midtown South, as well as a continuously growing interest in flexible office space.”
Elie Reiss of Skylight Leasing represented Knotel, while Michael Liss and Samuel Spillane of CBRE represented the landlord, Eretz Group. These transactions followed Knotel’s signing multiple leases in the past month, with its New York City portfolio totaling 1.5 million square feet.
Transwestern’s recently published Manhattan office report underscored the trend of co-working and flexible leases.
“If you had to sum up the highlights from Q3 in one word, it would have to be ‘co-working,’” says Danny Mangru, research manager at Transwestern. “Co-working firms accounted for almost 20% of all leasing activity this quarter, with four leases exceeding 100,000 square feet.”
Overall, office leasing activity is doing fairly well, he says. He points out that Transwestern’s Q3 figures show the seven million square feet of office space leased is down from last quarter’s 10 million square feet. But year-to-date office leasing is up 4% over last year’s total.