If the Manhattan office market could talk, it would probably say, “I don’t know how to put this, but I’m kind of a big deal,” and that is truly the mantra for office leasing this year. Through the first nine months of this year, 37 leases and renewals greater than 100,000 square feet were signed—16 of which were above 250,000 square feet.
These 37 transactions total 11 million square feet and account for 37.7 percent of the total square footage leased this year. From 2014 through 2016, leases exceeding 100,000 square feet averaged only 29.5 percent of the square footage leased. Demand for smaller leases does not stack up to previous years, as deals below 100,000 square feet account for only 62.3 percent of the square footage leased this year, compared with the 70.5 percent average from 2014 through 2016.
Of the 37 leases signed so far this year, 26 were new or expansions and accounted for 6.5 million square feet, and the remaining 11 were renewals totaling 4.5 million square feet. Expect more to be added to these totals as fourth-quarter large lease activity tends to be strong with an average of 12 big deals signed over the past three years.
With three months left to go this year, the square footage of these leases already surpassed both 2015 and 2016 totals of 8.9 million and 10.2 million square feet, respectively. Big deals are also on pace to exceed the previous two years’ total number of transactions with 44 completed in 2015 and only 42 completed in 2016. In comparison with 2014, which was the strongest year for leasing activity on record, big deal activity will likely surpass the 12.7 million square feet of leases signed and come close to the number of leases completed, which reached 50.
Stay classy, office leasing!