Manhattan Office Leasing Activity Drops for Third Straight Month
Leasing down 7% in November, as availability soars in Midtown South, Downtown.
Office leasing activity in Manhattan declined for the third consecutive month in November, hitting its lowest level since April 2021, as the market registered negative absorption of -1.36M SF, according to a new report from Colliers.
In a year-over-year comparison, Manhattan office leasing is down by more than 50%, the report said. November’s leasing velocity of 1.48M SF fell below the 2020 average monthly volume of 1.58M SF. In November 2021, leasing velocity in Manhattan was nearly 3.1M SF.
Leasing activity in Midtown grew by about 13% in November to 660K SF, and held steady at 240K SF in Downtown, but these somewhat positive results were offset by a 25% plunge in leasing activity in Midtown south, which totaled 580K SF. Also, the leasing totals in Midtown for October and November have been the lowest recorded all year, Colliers reported.
Availability rates soared to record levels in Midtown South and Downtown, at 17% and 20.6%, respectively, while Midtown availability held steady at slightly above 15%, Colliers said. Over the last two months, the overall available supply in Manhattan grew by 3.8% to nearly 92M SF, an increase of more than 70% since the beginning of the pandemic.
Net sublet availability in Manhattan, which grew in November to 20.74M SF, is up nearly 12% since the beginning of the year and is approaching the pandemic peak of 21M SF notched in July 2021.
The average office asking rent in Manhattan increased by 1% in November to $72.68/SF, but this rate is still 5.4% lower than the March 2020 average of $79.47/SF.
More than 894K SF of office space was added to the available supply at Penn 2 in Midtown South. The available supply has more than doubled in Midtown South since March 2020 to about 33M SF.
Four of the top five lease transactions in Manhattan in November involved new leases, including Jay Suite’s 60K SF lease at 159 W. 25th St.; Anchin, Block & Anchin’s 49.8K SF lease at 3 Times Square; Spencer Stuart’s 50K SF lease at 90 Park Avenue; and Brookfield’s 43K Sf lease at 225 Liberty St.