Global consultancy FTI Consulting is consolidating and relocating several Manhattan offices to a 120,000 square foot space at the 1166 Sixth Avenue tower.
The business consulting firm will occupy the 14th, 15th, and 16th floors of the 44-floor tower, which has approximately 1.7 million square feet. The skyscraper – also known as the International Paper Building – underwent a $50 million renovation in 2017.
1166 Sixth Avenue is also the headquarters of Marsh & McLennan Companies and Huron Consulting Group.
The office lease has a term of 15 years and has a rent “in the $80s per square foot,” a source familiar to the transaction told The Real Deal, a New York real estate news site. That would place the rent between $9.6-$10.6 million.
Commercial real estate firm JLL represented building owner Edward Minskoff, while Colliers International represented FTI.
The 120,000 square foot deal is one of the largest Midtown leases since the Covid-19 pandemic hit New York. High rents, high taxes, a suspension of cultural and social events, store closures, job losses, and a shift to remote work have retailers, office lessees, and residents leaving NYC in droves. What’s the point of living in an expensive cultural center when there’s no Broadway plays and restaurants are mostly shuttered? Why pay Manhattan rents when 90% of your workforce is working remotely?
A recent survey from Partnership for New York found that one in four office employers expect to reduce their footprint by at least a fifth, and approximately 16% expect to move jobs out of the city.
With tourists gone and offices sitting mostly empty, some national retailers are fleeing Manhattan. Chains such as J.C. Penney, Kate Spade, Subway, and Le Pain Quotidien have closed their branches for good, according to an August New York Times article.
Meanwhile, New York moving companies are turning away customers amid high demand. Flat Rate Moving told the New York Times that it has seen moves increase 46% between March 15 and August 15, with the number of those moving outside New York City up 50%.
In a move counter to a large, consolidated downtown lease, Chicago-based consultancy Sikich announced that it would be moving to a mostly remote model, with an expanded number of geographically distributed micro offices.