Manhattan’s Asking Rates Stay Steady Despite Coronavirus Lockdown

NEW YORK CITY—Manhattan finished out the second quarter with 2.15 million square feet of leasing activity, a 65% decrease from first-quarter 2020 and 69% below the five-year quarterly average, according to CBRE’s quarterly report on the market. Yet, despite the steep decline in leasing, the average asking rent was $81.30 per square feet, essentially flat quarter-over-quarter but up 1% from the same period last year.

 “Occupiers unsurprisingly adopted a wait-and-see approach to their real estate needs in Q2, with the COVID-19 caseloads spiking for most of the quarter and considerable uncertainty about the long-term impact on the economy,” said Nicole LaRusso, director of Research and Analysis for the CBRE Tri-State region, in prepared remarks.  “While asking rents have not yet budged as a result of the drop in market demand, we do expect them to fall by 10% to 16% by the first quarter of 2021 before beginning to recover.”