Manhattan Office Availability Rate Hits Another Record High

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The amount of available office space in Manhattan hit another record high last month, even as more companies call their staff back to in-person work and leasing activity picks up, according to a report from Colliers International.

Manhattan’s availability rate grew to 17.1 percent in May, clearing April’s 16.5 percent that was the highest that Colliers has ever recorded, and well ahead of the previous 13.9 percent record set in the third quarter of 2003, in the twin wakes of the 9/11 terrorist attacks and a recession.

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The Downtown submarket had the highest availability rate of the three tracked by Colliers, jumping from 17.4 percent in April to 18 percent in May. Midtown followed with a 17.4 percent rate last month, and Midtown South’s rate was 16.1 percent.

Availability rate chart
Manhattan’s availability rate hit a record high in May compared with April and May 2020. Photo: Colliers International

However, there were some bright spots last month for a Manhattan office market still reeling from the coronavirus pandemic.

Office leasing activity hit 1.5 million square feet in May, ahead of the 983,000 square feet in April and the 1.4 million square feet in May 2020, according to the report.

Meanwhile, the average asking rent for space climbed from $72.97 per square foot in April to $73.26 in May. And, despite sublease space continuing to come on the market in May, the borough’s glut of space available for sublet seems to be waning.

Net sublet availability decreased by 200,000 square feet, the second month in a row that that number dropped, according to the report. Sublease space now represents 22.8 percent of available Manhattan office space, still far ahead of pre-pandemic levels, but its lowest figure since July 2020.

Manhattan’s increasing availability comes as financial companies have started to call their staff back to the office, while major tech giants commit to in-person work.

JPMorgan Chase, Goldman Sachs and Blackstone Group have reopened their U.S. offices, while Facebook plans to bring some employees back to its New York City offices next month.

Even with a plan for increased remote work, a Facebook executive told Commercial Observer this week that the social media giant is committed to its physical offices.