Stat of the Week: 7.3 Million Square Feet
By the end of August this year, Manhattan’s available sublease supply reached a recent low of 6.7 million square feet, accounting for only 16.2 percent of the total available supply. During this value-driven real estate cycle, sublease space has been in high demand, and the market actually shed 10 million square feet of sublease space since 2009. But over the last three months, available sublease space has been on the rise, as over 630,000 square feet was added to the market. A total of 18 blocks of space greater than 35,000 square feet hit the market since August, bringing the sublease supply back up to over 7.3 million square feet. This increase means that sublease space now accounts for 17.5 percent of the total available supply—right back to where it was at the end of 2013.
Midtown’s available supply has been affected the most by this influx of subleases, as 13 of the 18 large blocks ranging from 35,000 to 300,000 square feet are located there. These spaces have increased the sublease supply by more than 680,000 square feet to over 4.8 million square feet. Sublease space now accounts for 19.2 percent of Midtown’s available supply, up from a low of 16.3 percent earlier this year.
Midtown South’s sublease space accounts for 20.2 percent of its available supply and is the highest percentage of out of the three major markets, but it is significantly down from its high early in 2014 when it topped out at 27.2 percent. Despite two sublease spaces added to the market in September, continued demand for space in Midtown South caused the available sublease supply to drop back down over the next two months to its lowest level since 2011.
Downtown’s 1.1 million square feet of available sublease space accounts for only 11.1 percent of its total available supply. Sublease space jumped in September from 1 to 1.2 million square feet, as three big sublease spaces hit the market. Since then, the available sublease supply has dipped again, but is still slightly above August levels.