Manhattan total leasing activity reached 20-year high levels through midyear 2017, as 15.4 million square feet of new leases and 5.4 million square feet in lease renewals were signed. With demand strong in the first six months of this year, what does future demand for space look like over the next six to 12 months? Currently, there are 372 tenants requiring space greater than 10,000 square feet in the market, searching for an approximate total of 24.8 million square feet. This is down from 15 months ago, when there were 452 tenants looking for space requirements, an 18.4 percent drop-off. Only 50 of the 372 tenants in the market have requirements of 100,000 square feet and greater, down from 15 months ago when there were 69 large tenant requirements. This decline is directly attributed to 24 large leases signed through midyear.
Despite the decline in the number of tenants looking for space, financial and TAMI (technology, advertising, media and information services) firms continue to dominate the demand landscape and combine to form 49.2 percent of the tenants looking for space and 45 percent of the square feet required. So let’s examine the top five industries currently in the market and see where the bulk of the future demand will likely come from.
Financial Services: The leading industry for leasing space so far this year plans to continue this trend in the near future as 92 tenants look for 7.2 million square feet of space. The average size of financial tenant requirements is 78,060 square feet, due to 13 tenants searching for 100,000-plus square feet.
TAMI: It comes in a close second place with 91 tenants looking for space but drops off from the financial sector’s square foot requirement by 44.7 percent. With only five tenants looking for greater than 100,000-square-foot spaces, TAMI requirements total 4 million square feet and only a 43,659-square-foot average.
Public Sector: This sector has been busy the past 18 months and does not plan on stopping, as government, nonprofit and educational entities have 54 requirements in the market. This sector’s space needs 3.6 million square feet total with an average-sized requirement of 67,343 square feet, fueled by eight large tenants seeking space.
Legal Services: There are 38 law firms in the market in need of 2.9 million square feet. This industry has the second-highest total of large requirements with nine firms looking for greater than 100,000 square feet, which propels this sector’s average requirement to 77,368 square feet.
Professional Services: This sector rounds out the top five with 36 companies looking for 2.6 million square feet of space. Only six large requirements are from this sector, but it still has a solid size requirement average of 72,792 square feet.