The first half of the year has been robust for New York in the office space — at least when it comes to leasing. A Manhattan market report from Savills finds that total activity hit 21.1 million square feet, which marks the best performance in a first half for the borough since 2014, when 21.1 million square feet was recorded.

While the second quarter did show some signs of cooling off with just 8.8 million square feet of activity, the figure was up 1.7 percent year-over-year.

New York University posted the largest deal by far, thanks to its 1.07 million square feet new lease in Greenwich Village. The next closest were Amazon and Goodwin Procter LLP, which took 330,000 square feet and 244,433 square feet, respectively, in Grand Central and Flatiron.

The strong demand came even as space became more limited. The availability rate dropped 280 basis points year-over-year to 17.2 percent in the second quarter. Interestingly, Class B and C assets showed some resiliency in this category.

"The Class B/C availability rate tightened 110 basis points (bps) from a quarter ago to 18.3% as a result, driving a 50-bps overall reduction in Manhattan office availability to 17.2%, Manhattan Class A availability held flat on the quarter at 16.4%," Savills explained.

However, this wasn't the case with asking rental rates, which dropped by 2.2 percent to $74.96 per square foot. Class B and C's notably suffered a 1.5 percent drop to $60.03 per square foot compared with Class A's, which increased by a modest 0.8 percent to $86.01 per square foot.

Savills predicts in its outlook that financially stable Class B properties will draw tenant interest along with other "well-located" and maintained office properties in Manhattan. Also, the CRE firm is forecasting Class A rent growth to "accelerate," namely in markets including Grand Central, the Plaza and Hudson Yards.

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