Manhattan Office Leasing Ticks Up 58% in October
By Rebecca Baird-Remba November 1, 2023 5:53 pm
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The Manhattan office market saw a bright spot last month with a 58 percent spike in leasing volume compared to September, but that’s mostly thanks to four large deals.
Tenants signed just shy of 2.6 million square feet of office leases last month, up from 1.64 million square feet in September and a 63 percent increase from October 2022’s 1.6 million square feet, according to Colliers’ October leasing report.
Nearly half of last month’s leasing volume came from a handful of transactions in excess of 100,000 square feet, including the New York City Administration for Children’s Services’ 530,000-square-foot extension at 150 William Street, Ralph Lauren’s 256,000-square-foot renewal at 601 West 26th Street, Weill Cornell’s 216,000-square-foot renewal and expansion at 575 Lexington Avenue, and LinkedIn’s 144,000-square-foot expansion at the Empire State Building.
Average asking rent across Manhattan remained effectively flat last month, increasing only slightly from $75.28 per square foot last month to $75.40 per square foot, Colliers said. Asking rents remain below the March 2020 average of $79.47 per square foot.
Even with the rash of large deals, Manhattan’s availability rate for office space still remains above pre-pandemic levels, at 17.8 percent for October, up a full percentage point from October 2022, according to Colliers.
Manhattan continues to struggle with large blocks of vacant space, even with above-average leasing across Midtown, Midtown South and Downtown. Despite seeing an October leasing volume of 780,000 square feet — 72 percent above its five-year rolling average — Lower Manhattan still has more vacant space than any other office submarket, at 21 percent availability. And 70 percent of the neighborhood’s leasing volume last month came from the 150 William Street deal, Colliers found.
Although leasing could pick up dramatically with end-of-year deals — with several triple-digit deals reportedly set to close before New Year’s — Colliers research chief Frank Wallach said there would have to be another 8 million to 9 million square feet of leases signed in November and December for 2023’s leasing total to match the square footage from 2022.
“You would need to see a notable uptick in leasing activity for that to happen,” Wallach said. “Not all the drivers [of leasing] from pre-2020 are the same as today.”
He added that “we’ve seen a pullback from some industries,” particularly in tech and coworking, which could get worse as WeWork is reportedly gearing up to file for bankruptcy this month.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.
