Big blockbuster movies will continue to hit theaters all summer long as moviegoers try to get spooked by remakes of old classics like Poltergeist or the action-packed fifth installment in Terminator: Genisys. But no matter what your movie genre preference is, the Manhattan office market has its share of potential blockbusters this summer with 74 blocks of available space greater than 100,000 square feet. Although 74 seems like a large amount of supply, big-block availabilities have been on the decline over the past two years. After peaking at 83 in 2013, steady leasing activity for these spaces has chipped away at the supply, and with the market averaging 55 leases completed more than 100,000 square feet over the last three years and 22 such deals already signed this year, the market is on pace to drop the supply even further.
Midtown has had the most absorption of big blocks over the past year, as only 47 are currently available compared to 54 last May. Midtown leads all markets with seven of 11 blocks of available space in the 250,000 to 500,000-square-foot range. Rounding out the remaining Midtown availabilities, there is only one block greater than 500,000 square feet available, but many options in the 100,000- to 250,000-square-foot range, with 38 available.
Midtown South’s high demand in recent years has caused big-block supply to dry up. Although this market is not famous for a plethora of large availabilities, it has dropped from a high of 14 spaces in 2013, down to only six in May, and as low as five in recent months. And if that was not limiting enough for tenants looking for big spaces in Midtown South, all six blocks of space are less than 200,000 square feet. Due to the strength of the Midtown South market, any large blocks placed on the market have been leased in less than 12 months.
Downtown took a hit at the big box office this year, as large-block availabilities increased to 21 this year, up from 14 one year ago. Downtown also leads the market with the most blocks of space greater than 250,000 square feet with nine, five of which are greater than 500,000 square feet.
Richard Perischetti is vice president of research & marketing at DTZ.