BY THE EDITORS

Last week, The Commercial Observer rolled out a new blog, Wired City, focusing on one of Mayor Michael Bloomberg’s signature infrastructure initiatives as he winds down his final term in office: expediting technological upgrades at the city’s office buildings.

“With the tech sector growing in Midtown South’s Silicon Alley at an unprecedented pace, landlords are increasingly forced to compete with major metropolitan cities to provide 21st century real estate solutions to tenants,” said Jotham Sederstrom, editor-in-chief of The Commercial Observer and Wired City.

He added that the current crop of mayoral candidates will also have to make hard choices with regards to the policies surrounding the city’s aging building infrastructure.

“Unfortunately, until now, they haven’t had many resources to draw from to get news on technology and infrastructure,” Mr. Sederstrom said, “which is where we come in.”

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BY GUS DELAPORTE

Jacobs Engineering Group has signed a 12,200-square-foot sublease on the fourth floor at Vornado’s Two Penn Plaza, The Commercial Observer has learned.

Rosenberg, Neuwirth & Kuchner, an accounting firm, had previously occupied the space on a sublease from Forest Electric. The firm was recently acquired by Marks Paneth & Shron and relocated to 685 Third Avenue. In turn, MP&S sublet the space to Jacobs when the engineering firm was looking to expand its presence in the building.

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BY ROBERT KNAKAL

The recovery in the property sales market continues to outpace the recovery in the broader economy and is, in fact, performing better than the recovery in commercial real estate’s underlying fundamentals would dictate. Last year was a banner year and therefore this year is lagging comparatively, but activity is better than we had in 2011, a year in which we were all feeling very happy.

In the first half of 2013, there was $13.3 billion of investment sales activity. On an annualized basis, this $26.6 billion figure is running at a pace that is about 35 percent below last year’s $41 billion. It is, however, comparable to 2011, when there was about $28 billion in sales. In 2012, we saw significant increases in volume due to many sellers rushing to beat the capital gains tax increase. While dollar volume is lower thus far in 2013, it is important to remember that in 2011 participants in the property sales market in New York City were feeling great, and we are on about that same pace this year. Additionally, we believe that activity will pick up significantly in the second half of the year, and we stand by our projection, made at the end of 2012, that investment sales volume will be about $40 to $41 billion this year.

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BY RICHARD PERSICHETTI

Midtown South rents continue to creep closer to Midtown’s. The difference between Midtown and Midtown South pricing for Class A and Class B space combined is 14 percent—the narrowest in recorded history. This is a substantial change compared with the third quarter of 2008, when the gap between the pricing for these two markets was at its widest, a 75 percent difference.

Back then, Midtown Class A/B average pricing was $35 per square foot higher than Midtown South’s. But today, at $70.58 per square foot, the Midtown Class A/B average asking rent is only $8.73 per square foot higher than the Midtown South Class A/B asking rent of $61.85.

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