Demand is beginning to ease in Manhattan, one of the nation’s strongest office market recoveries since the pandemic.
A report from Colliers finds that leasing volume in April was 3.38 million square feet, representing a 26.2 percent decrease from the previous month. Downtown and Midtown led the declines, with leasing in both submarkets a third of the volume seen from March levels.
"The drop in demand was not surprising, however, since March represented the strongest activity since December 2019," Colliers wrote in further context.
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The category was also up 23 percent year over year and 25.4 percent above the 10-year monthly median.
Amazon secured the top leasing deal of April thanks to its 330,000-square-foot deal at 10 Bryant Park. That was followed by Goodwin Procter and Apollo Global Management, which secured 244,433 square feet and 96,276 square feet in Midtown South and Midtown, respectively.
Rents followed a similar trend to leasing. The $74.37 average ask in April was down from the $74.53 per square foot in March, but up from the $74.11 seen 12 months prior.
This comes as a recent March VTS Office Demand Index (VODI) report found that the region experienced a 4.7 percent year-over-year decline during the month. But even with the pullback, NYC scored a rating of 82, which still leads all cities tracked in the report. This could indicate that the fundamentals remain healthy, despite a recent slowdown.
And there were some good signs to show that out of the Colliers report. For one, availability dropped 0.4 percent to 15.7 percent, marking the lowest level seen since February of 2021. Plus, the 2.10 million square feet in net absorption marked the 10th straight month that the category was in positive territory. Moreover, sublet availability dropped by 500,000 square feet, the seventh straight month of declines.
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