Manhattan Office Market Sees Strongest Monthly Leasing Since 2019

Office leasing activity in Manhattan in January more than doubled the total in December, becoming the strongest month of leasing for the nation’s largest office market since December 2019.

January’s leasing total surged to more than 4.4M SF in Manhattan from December’s tally of 1.9M SF, with the lion’s share of the new leasing activity coming in Midtown—which notched 3.2M SF of leases—according to Colliers’ new January report for the Manhattan office market.

The surge of leasing velocity in Midtown was nearly triple the December total of 1.1M SF, representing the strongest month of demand in Midtown since July 2018; Midtown South saw activity surge to 1M SF from the December tally of 588K SF.

Despite the increase in demand, Manhattan’s average availability rate did not shrink, holding steady at 16.9%. Availability in Downtown remained plateaued at December’s level of slightly above 20%. Since the beginning of the pandemic, total availability in Manhattan has grown nearly 70%, now encompassing more than 91M SF.

Net absorption in Manhattan remained flat about 150K SF. Net sublet availability grew by 150K SF in January to a total of 20.7M SF. Although this was 2.2% below the pandemic peak of more than 21M SF in July 2021, Manhattan’s total sublet inventory has grown by nearly 14% since January 2022—with the net sublet inventory in Downtown growing by nearly 25% during the same period, to nearly 6M SF.

Average asking rents in Manhattan are holding steady at about $75 per SF/year, the same level they were at in January 2022. Average asking rents in Midtown are about $79/SF, while Downtown asking rents average about $60/SF.

Colliers said the surge in leasing activity—which also nearly doubled the January 2022 pace of 2.9M SF—was driven by five deals that each featured a lease encompassing more than 250K SF; together, these five leases accounted for more than half of Midtown’s surging totals.

Two of the five largest lease deals in January involved extensions of the headquarters space at 1211 Avenue of the Americas for the crown jewels of Rupert Murdoch’s media empire: Fox Corp., which inked a 15-year extension for 666K SF in the office tower across the street from Radio City, and News Corp., which extended a 585K SF lease.

Citadel Enterprise Americas renewed a 585K SF lease at 350 Park Avenue and inked a new deal for a 393K footprint at 40 East 52^nd St.

In Midtown South, Two Sigma Investments renewed a 265K SF lease at 100 Avenue of the Americas. KKR expanded its lease at 30 Hudson Yards, absorbing a 219K SF footprint that became available when Meta decided to opt out of its lease on the space.