Manhattan Leasing Momentum Slowed in January, but Don’t Blame Omicron: Colliers

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Manhattan office leasing dipped in January compared to December 2021, but analysts say factors other than the omicron variant are at play in the loss of momentum.

The borough saw 2.3 million square feet of office space being leased in January, a decrease of 19 percent compared to the previous month, but still 26 percent higher than the 1.8 million square feet leased in December 2020, according to a report from Colliers.

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Colliers’ senior director of research Frank Wallach noted in a statement that it is not uncommon to see volume taper off from December to January due to tenants rushing to sign leases before the year ends. 

“Then in January, there’s usually a bit of a drop-off, by comparison,” Wallach said. “However, January 2022’s leasing volume still surpassed the average monthly volume in 2020 and 2021. Even though January’s leasing was still 36.2 percent below the 2019 average monthly volume, it was an improvement when looking back at full-year 2021 volume, which was 41.9 percent below 2019’s full-year volume.”

In Midtown, there were about 1.1 million square feet leased in January, meaning activity fell by 42 percent since the prior month and by 18 percent year-over-year. Downtown saw about 500,000 square feet leased, a significant increase from the 120,000 square feet signed in December.

In terms of availability, there was 0.1 percent fewer office square footage on the leasing market in January compared to December, bringing the availability rate to 17.2 percent. But Manhattan’s overall availability has increased by 72 percent since the COVID-19 crisis began in earnest in March 2020, to a total of 92.6 million square feet.

January also saw asking rents increase for the fifth month in a row, this time by 0.1 percent to $75.08 per square foot, according to Colliers.

Manhattan saw more than 8.6 million square feet leased in the fourth quarter of 2021, a 19.3 percent spike compared to the previous quarter and double the 4.2 million seen in the last three months of 2020, according to Colliers data released last month.

Mark Hallum can be reached at mhallum@commercialobserver.com.