The Manhattan office leasing stats through the third quarter this year are up and down. Year-over-year, overall vacancy is up; new leasing activity is slightly down; lease renewals are significantly up; and overall average asking rents continue to rise.
Manhattan vacancy bumped up 20 basis points from one year ago to 9.1 percent, the third time it has reached this high over the last 12 months. Surprisingly, Midtown South had the largest year-over-year increase in vacancy—90 basis points to 6.7 percent. Midtown vacancy is up as well, 20 basis points to 9.5 percent, while Downtown was the only market with a year-over-year decline, down 40 basis points to 9.9 percent.
New leasing activity in Manhattan started off slowly in 2016, but the pace has picked up in the last two quarters and was only down 6.2 percent compared with one year ago, with over 20.5 million square feet leased. On the other hand, 8 million square feet of lease renewal activity occurred and was up 44.7 percent compared to one year ago. New leasing activity is down in all three markets, while lease renewals were up in all three.
New leases in Midtown South totaled over 3.9 million square feet, a 3.8 percent decline compared with one year ago, while renewals almost tripled to 830,142 square feet. Midtown new leasing activity jumped by 29.9 percent over the last four months compared with the first four months of 2016, and is now only 5.5 percent off from last year’s total with over 13.6 million square feet leased. Lease renewal activity was up as well, 17.5 percent to 5.5 million square feet. New leasing in the third quarter was slow Downtown and was 12 percent less than it was one year ago with just under 3 million square feet leased, while lease renewals more than tripled with over 1.6 million square feet renewed.
Manhattan overall average asking rents are up 3.8 percent from one year ago to $73.71 per square foot. Midtown South had the largest overall asking rental increase, up 4.8 percent to $70.29 per square foot, followed by Midtown, which grew 3.7 percent to $79.91 per square foot. Downtown rents have been on the decline the last three quarters, but were still up 2.1 percent year-over-year to $59.13 per square foot.