The office sector in Manhattan is coming off a strong month thanks to a big deal providing momentum, as leasing is now on track to see the best annual pace in 26 years.
Leasing activity surged by 17.3 percent in May compared with April to 4.24 million square feet, a market report from Colliers finds. Also, the number exceeded the 10-year average by over 50 percent or 2.79 million square feet.
Leading the way in carrying the momentum was Simpson Thacher & Bartlett's 916,000-square-foot lease at the 570 Fifth Avenue development in Midtown. According to Colliers, this was the second largest office deal made so far this year in Manhattan.
The next two largest in May were Google's 410,556-square-foot renewal at 315 Hudson Street and Versant's 249,054-square-foot deal at 229 West 43rd Street. Rounding out the top five were Baker McKenzie and HDR, with 121,833 square feet and 74,436 square feet signings, respectively, at 10 Bryant Park and 7 Penn Plaza.
"Manhattan's year-to-date leasing activity reached 19.63M SF, almost a 10.0% increase over the 17.91M SF recorded during the same period last year," Colliers said.
"If demand continues at the same pace for the remainder of the year, 2026's total volume would be the highest since 2000."
Outside of leasing, rents continued to accelerate, up by a modest 0.3 percent month-over-month to $77.76 per square foot. This is the highest level seen since August 2020, but remains 2.2 percent below the total posted in March 2020. The strongest monthly growth was seen in Downtown, which enjoyed a 1.7 percent gain to $63.28 per square foot.
Availability tightened by 20 basis points to 13.2 percent.
That came as net absorption was positive at 740,000 square feet on total available supply of 69.18 million square feet, which is the lowest amount seen since October 2020.
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