There have been several signs that the office market in New York City was looking up: Anecdotal lease deals, office investment rebounding and the beginning of workers returning to the office. The first quarter stats, unfortunately, don't show a recovery. According to the first quarter report from Colliers, Manhattan office leasing fell 11.6%, and office demand was 7.1% below Manhattan's five-year rolling average and 6.9% below the ten-year average. 

According to the report, it isn't odd to see a fourth quarter-to-first-quarter decrease in leasing activity. In fact, there has been a decrease from Q4 to Q1 for the last seven years, with an average decline of 17.5%. There were also several positive signs that demand for office space is returning to the market. Leasing volume increased 67.5% and average rents increased 2.6% year-over-year, although they still trail below the rate at the start of the pandemic, down 5.5%. 

FIRE industries, which include financial services, insurance and real estate, drove the leasing activity in the quarter, accounting for 36% of the activity. TAMI industries, on the other hand, accounted for the second most leases during the quarter at 23% of the market activity.