Tenants continue to grab more office space in Manhattan. Activity during August accelerated by more than 20 percent from July to reach 3.70 million square feet, according to a market report from Colliers. That number is 36.2 percent above the 10-year monthly median.
Of the submarkets tracked, Midtown South stood out with its impressive 64.8 percent leasing surge to 2.18 million square feet. Meanwhile, Midtown only saw a "slight" gain, while Downtown's volume was reduced in half, according to Colliers.
The leasing numbers follow a strong July Manhattan office report, when Colliers originally noted that annual volume in the borough was on pace to exceed 40 million square feet. August did nothing to change the trend, and as a result, the CRE firm is reiterating that position. Assuming that happens, it would mark the first time since 2019 that 40 million square feet of signings were exceeded.
The biggest lease by far in August was claimed by Deloitte, which signed for 807,000 square feet in Midtown South. WeWork struck the next largest, with its 259,000 square foot deal in Midtown, followed by Piper Sandler Companies (136,175 square feet in Midtown).
Along with strong deal activity, availability continues to trend lower. In August, the rate dropped 20 basis points to 15 percent, the lowest level seen since January 2021. Additionally, sublease space was at its lowest levels since July 2020 (12.95 million square feet).
"The availability rate has also tightened or remained stable for 18 consecutive months," Colliers wrote in further context.
Rents overall rose by one percent to $74.73 per square foot. Prices remain down by six percent compared with March 2020.
Moreover, net absorption is continuing its positive trend over the past four years. In August alone, the number totaled +1.39 million square feet.
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