Non-profits, art groups and even some media companies are being forced out of the Midtown South neighborhood they’ve long called home thanks to the area’s exploding office leasing market, according to the Wall Street Journal.
Class A rents have increased 20 percent in Midtown South in the last year, and the area’s vacancy rate of 6 percent places it among the most competitive submarkets in the entire nation.
As a result, prominent non-profit and arts organizations, including the Theatre Development Fund, which operates the TKTS booth and the Harry Fox Agency are left to find new digs when their leases expire. Last year, for example, the Theatre Development Fund moved out of the Starrett-Lehigh Building — which was purchased for $920 million — because it couldn’t score a “cheap rent” and headed to Astoria. Rents in the building now surpass $60 per square foot, the Journal said.
As demonstrated by the fund, Midtown South transplants aren’t merely looking at cheaper office stock in the Garment and Financial districts. Western Queens and Downtown Brooklyn could be the main benefactors, much to the delight of advocates in those communities.
“Almost every search now we spend some time thinking about, talking about the boroughs,” said Paul Wolf, principal at Denham Wolf, which specializes in advising non-profits. [WSJ]