Manhattan's commercial real estate sector is demonstrating significant momentum, marked by three high-profile developments that underscore market confidence despite political headwinds. The week saw the groundbreaking for the new American Express tower at Two World Trade Center, the commencement of full-scale demolition at 350 Park Avenue, and the sale of 281 Park Avenue South to Airbnb.
These actions reflect a commercial economy perceived as strong, capable of overcoming impediments, delays, or political opposition. The completion of the World Trade Center site, a project that faced considerable opposition in the years following 9/11, has been a long-standing endeavor. The start of construction for Two World Trade Center by Silverstein Properties, with American Express as the anchor tenant, marks a significant milestone after more than two decades. The project experienced setbacks when initial anchor tenants withdrew, but the American Express deal is seen as a personal triumph for Larry Silverstein, the 96-year-old developer, navigating political and bureaucratic resistance.
Mayor Zohran Mamdani attended the groundbreaking for Two World Trade Center, offering praise for the private-sector project. "I am proud to welcome American Express’s new global headquarters to Lower Manhattan," Mamdani stated. "This is not just a sign of confidence in the future of our city — it is an investment in thousands of good jobs, the local economy, sustainability and the final piece of the rebuilt World Trade Center."
In Midtown, demolition at 350 Park Avenue is underway, signaling developer intent to proceed with a nearly one million square-foot lease commitment for Citadel companies, led by Ken Griffin. Griffin is a partner in the project with Vornado and Rudin. The extensive demolition across three buildings on Park Avenue and East 51st and 52nd streets suggests confidence in Griffin's commitment to occupying half of the planned 1,414-foot skyscraper.
Similarly, the acquisition of 281 Park Avenue South by Airbnb for $81.5 million suggests corporate priorities can outweigh a challenging political climate. Mayor Mamdani and Congressman Brad Lander have been critical of Airbnb, and the Eric Adams administration previously implemented regulations targeting short-term rentals. The purchase of 281 Park Avenue South, a property originally owned by a Protestant church organization and later sold to Aby Rosen's RFR in 2014, prevents potential years of vacancy. Rosen commented on the sale, stating, "Great buildings reward great stewardship. We bought 281 Park Ave. South because it’s a masterpiece, restored it with the care a landmark deserves, and this outcome is the result."
Despite these high-profile transactions, commercial real estate metrics can present a complex picture. A second-quarter survey by JLL reported an overall vacancy rate of 13.5% in Manhattan, with similar figures from CBRE, Newmark, and Colliers. However, Cushman & Wakefield reported a significantly higher overall vacancy rate of 19.3%. Garrett Derderian, vice-president for US corporate communications at Cushman & Wakefield, explained that their methodology includes leased but not yet physically occupied space in their statistics. "It’s the most accurate way to calculate absorption which is why we use this methodology," Derderian said. "So when the tenant occupies the space we delete the leased availability so it is not double-counted."