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Office availability in Manhattan remained at about 17% last month, which matched the all-time high from two months ago, The Real Deal reports. Meanwhile, area asking rents fell to their lowest level in years. The high availability rate is somewhat surprising because Manhattan’s office leasing volume increased 15% compared to June, per Collier International’s monthly market snapshot.
In July, Manhattan leasing volume reached 2.35 million square feet—well above the monthly average of 1.58 million square feet. in 2020. The uptick in leasing volume was still well below what is was in 2019—there was a 35% drop since that time. The city averaged 3.58 million square feet per month prior to the COVID-19 pandemic.
“Manhattan leasing volume during the first half of 2021 totaled 9.11 million square feet, marginally higher than the 8.97 million square feet of activity during the second half of 2020,” Colliers’ report said. “However, if leasing activity were to continue at the current pace for the remainder of 2021, full-year leasing volume would fall below 2020’s record low of 18.97 million square feet.”
Meanwhile, more subleasing opportunities have become available, a reverse from the downward trend that had occurred the three months prior. Net sublet availability increased by 360,000 square feet to 21.61 million—the most Colliers had tracked since the beginning of the pandemic, The Real Deal reports. Additionally, the sublet inventory in July was almost twice as much as what was seen last March (11.9 million square feet.
While Manhattan office availability remains high, asking rents have stayed low. The average asking rent of $72.72 per square foot—an 8% decrease from 2020 and the lowest level since 2017, per Colliers’ report. July’s top two leases were both signed in the Financial District, The Real Deal reports. Law firm Fried, Frank, Harris, Shriver & Jacobson signed a 400,000 square foot renewal at office tower One New York Plaza. Brookfield Property Partners, Chinese sovereign fund China Investment Corporation, and AEW Capital Management own the property.
New York City’s government signed the second largest office lease in Manhattan last month—a 313,000 square foot renewal at Piedmont Office Realty Trust’s 60 Broad Street. The downtown submarket remains at record highs in the terms of availability however—18.3%. More than 100,000 square feet and 81,000 square feet was added to the market at 88 Pine Street and 110 William Street, respectively.
“Manhattan’s FIRE (financial services, insurance and real estate) sector led leasing by industry with a 32% share during (the second quarter) of 2021,” the report said. “Within the FIRE sector, approximately 3% of Manhattan’s second quarter volume included leases by flex/coworking companies, up 1% during (the first quarter) 2021. At 21% the TAMI (technology, advertising, media and information service) sector had the second-largest share of office leasing during the quarter.”
Joe Dyton can be reached at [email protected]
The post Report: Manhattan office availability remains high, rents hit four-year low appeared first on Connected Real Estate Magazine.