Manhattan on Track to Have Lowest Leasing Year So Far This Century
Year over year leasing activity decreased by 20.9% and August 2020 leasing in Manhattan was 63.7% lower than the monthly average in 2019.
Leasing activity in Manhattan was at 1.30 million square feet in August, which is nearly less than half of what it is was in July, according to a report by Colliers International.
The report shows that the year over year leasing activity decreased by 20.9% and August 2020 leasing in Manhattan was 63.7% lower than the monthly average in 2019.
“If leasing volume continues at the same rate for the remainder of the year, 2020 would end up with the lowest full-year leasing volume so far this century,” the report states.
The borough’s monthly availability rate jumped up by 0.8 percentage points to 11.8%, the report states, which is the highest availability rate in Manhattan since 2013. Net sublet availability increased by 1.31 million square feet.
The report shows that sublet inventory made up for 23% of Manhattan’s total availability. That is the highest availability rate since 2010.
In the Midtown section of the borough, leasing activity was down nearly 70% since July and by 32.8% from August 2019. That said, four of Manhattan’s five largest leases occurred in Midtown.
Raymond James Financial Inc. leased 144,704 square feet at 320 Park Avenue; FTI Consulting took on a 120,720 square feet lease at 1166 Avenue of the Americas. CBRE Inc. expanded its lease by 44,612 square feet at 200 Park Avenue. City National Bank renewed its lease of 35,643 square feet at 1140 Avenue of the Americas.
“Additionally, absorption increased—for the fourth consecutive month—by 0.7 pp to 12.9%, the highest availability since 2010,” the report says of Midtown.
On average, rent decreased from July to August by 0.5% to $85.51 per square foot.
In Midtown South leasing volume doubled since July and year-over-year leasing increased by 24.3%, according to the report. However, this was mostly driven by Facebook taking up a lease for 730,000 square feet at 390 Ninth Avenue, according to the report.
The availability rate in the area increased by 0.9 percentage points to 10.3%, the highest since 2010.
“A 377,000 square foot block of available space was listed at 20 Hudson Yards while 100,000+ square foot new inventory was listed at 1 Hudson Square (sublet) and 1250 Broadway (sublet),” the report states.
Rent decreased for the fifth month in a row in Midtown South. Rent on average is now listed at $74.40 per square foot because of below-average pricing at 1 Hudson Square and the above-average price at 390 Ninth Avenue.
Finally, Downtown’s month leasing volume, shown at 0.02 million square feet, showed a sharp decrease from July 2020 and August 2019. The report shows that no leases for space of 25,000 square feet or more closed during August.