Colliers Monthly Manhattan Office Space Report Shows Mixed Message

With monthly leasing activity in the Big Apple having increased while seeing lower leasing volume year-over-year, the latest Colliers International Manhattan Monthly Snapshot for May 2020 is decidedly mixed.

According to the report, Manhattan’s monthly leasing activity increased by 5.2% at 1.42 MSF in May compared to April 2020, and was higher by 21.9% compared to March. Nevertheless, year-over-year leasing volume was lower by more than one-half and was 60.4% below the 2019 average monthly volume of 3.58 MSF.

There were only six separate 50,000+ SF leases in May 2020, compared to May 2019 which saw the closing of 14 separate 50,000+ SF leases, including two greater than 250,000 SF.

Manhattan’s monthly availability rate stayed steady at 10.3%—exactly where it was in April—in spite of the addition of two large blocks of space at 1540 Broadway and 390 Park Avenue (252,00 SF and 196,000 SF, respectively). The average asking rent fell from $79.58 / SF in April to $79.24 / SF in May.

Other highlights of the report:

- Monthly leasing in Midtown increased by 56.0% at 0.97 MSF, with three separate 100,000+ SF lease transactions. The blocks of space added at the aforementioned Broadway and Park Avenue locations were instrumental in pushing the monthly availability rate up by 0.2 percentage points to 11.8%, the highest since 2014. Leasing volume year-over-year, however, dropped by 15.5% and was 26.4% below the average monthly volume in 2019, which was 1.32 MSF. The asking rent average in Midtown decreased by 0.6% to $85.37 / SF, driven by above-average priced space leased and removed from the inventory at 151 West 42nd Street, as well as the addition at 1540 Broadway.

- Leasing in Midtown South increased by more than 50%—to 0.32 MSF—since April. Nevertheless, May 2020 leasing was 65.1% below the 0.92 MSF of activity recorded in May 2019 and 76.6% below the 1.37 MSF montly leasing average in 2019. Monthly average asking rent decreased to $77.53 / SF, a decrease of 0.5%. The availability rate was very tight for the second consecutive month, at 8.3% compared to 8.4% in April. MSG Entertainment Group’s 60,000 SF renewal at Penn 2 was the largest transaction in the area.

- The monthly leasing volume in Downtown dropped by more than 75% since April at 0.13 MSF and was lower by 86.3% year-over-year. The largest transaction in the area was an 86,000 SF new lease at 32 Old Slip by Policygenius. Only one 50,000+ SF block of space was added to the available inventory in May—at 100 Church Street, which was 92,000 SF. In spite of the leasing volume drop, the availability rate stayed stable at 10.5%. Average asking rent decreased by 0.2% to $66.05 / SF, led by the leasing at 32 Old Slip and the lower-repricing of 52,000 SF at 25 Park Row.

GlobeSt.com also recently covered Colliers’ sublease report for the area. Click here to read details on why activity remains low.