Office activity just won't slow down inside the borough of the city that never sleeps, as availability continues to plummet. Year-to-date leasing through last month for office Manhattan surged by 38 percent from the same period last year to 26.03 million square feet, according to a November report from CBRE. Of that amount, 5.79 million square feet represented renewals.
Total signings for October alone were 2.79 million square feet. This is up by 48 percent from the five-year monthly median.
The top lease of last month was Stripe, taking 139,497 square feet at 28 Liberty Street in Downtown, followed by Robinhood's 125,392 square feet deal at PENN 2 in Midtown. The next largest was another at PENN 2, with Dick's Sporting Goods signing for 125,284 square feet and then Baker & Hostetler, with its 115,078 square foot signing.
The strong leasing activity came as the office availability tightened by 250 basis points year-over-year to 16.4 percent. Also, Transwestern reported in a separate Manhattan office report that sublease space has fallen below pre-pandemic levels to 11.8 million square feet, as of November 1. That number is down by 875,500 square feet compared with the previous month and has plummeted by nearly 50 percent since the first quarter of 2023.
Meanwhile, asking rents remained flat at $77.22 per square foot, according to CBRE. And perhaps the worst of all was demand, which fell from 1.71 million square feet to 983,000 square feet. But still, it remains positive, with the year-to-date total now at 9.88 million square feet.
The report from CBRE comes after Savills revealed in its third-quarter report that Manhattan was set to see the best year of leasing activity since 2014. Core industries, including insurance, technology, advertising, media and financial services, are driving the office recovery, according to the CRE firm. Some developments to watch out for in the future for Manhattan office investors include more potential Fed rate cuts and return to office mandates, Savills previously said.
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