Manhattan’s Office Leasing in January Most Active Since Last Summer

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Office leasing activity in Manhattan hit its highest level in January since last summer, after COVID-19 tanked the market in 2020, but it was still far below pre-pandemic levels, according to a report from Colliers International.

January saw 1.9 million square feet of leasing activity across Manhattan, the highest since July 2020 and an 18.6 percent increase since December, the report found. It was also 20.3 percent higher than 1.58 million square feet of average monthly volume throughout 2020.

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However, January’s activity was still nearly 47 percent lower than January 2020 and far below the average monthly volume of 3.58 million square feet seen in 2019. Plus, the availability rate increased for the eighth month in a row to a record high of 14.9 percent, Colliers found.

“Demand did not keep pace with supply,” Franklin Wallach, senior managing director for Colliers’ tri-state research group, said. “That is certainly a noteworthy amount of supply.”

Midtown and Midtown South both hit record highs of availability rates — 15.7 percent and 13.7 percent, respectively — while Downtown saw its highest level since 2013 with 15.1 percent.

The amount of sublease space also kept increasing, adding more than 450,000 square feet in January. It now makes up about 24 percent of Manhattan’s total availability rate, just under the 25 percent marker Wallach said shows a “glut of sublet space” in the market that can drive prices down for direct deals.

But January had some other good news aside from the increased leasing activity. The top deals included more new leases, instead of the renewals and expansions that dominated previous months, including Beam Suntory’s 99,556-square-foot deal to move its global headquarters from Chicago to 11 Madison Avenue.

“It’s certainly a reversal from the background of the early days of the pandemic that people will leave New York,” Wallach said. “You never want to put too much weight on one deal, but this is a nice reminder that for talent and recruitment, New York is a market that still attracts.”