Manhattan Office Market on the rise in October
Manhattan’s office market received a much-needed jolt from its pandemic lows in October, although the recovery to 2019 levels remains far away.
Tenants signed leases for 2.7 million square feet of office space for the month, up 10.8% from September and the highest amount in a month since 3.6 million square feet January 2020, according to Colliers International Market Overview.
Year-to-date, Manhattan rental volume has exceeded 19 million square feet, exceeding the annual total for 2020, but still 43% below the 2019 pace.
Net sublease availability decreased to 19.8 million square feet, down more than 100,000 square feet from September. This is the third consecutive month in which sublease inventories have fallen sharply.
Average asking rents, meanwhile, rose 1.3% from September to $ 73.66 per square foot, reaching 7.3% of average rents at the start of the pandemic. This is the largest monthly rent increase requested in two years, according to Colliers.
But after falling in August and September, the availability rate in October rose 0.2 percentage point to 17 percent, a hair below the record 17.1 percent recorded in May and July. October saw a negative absorption of 0.9 million square feet, mainly due to the addition of 1.46 million square feet of available space at Brookfield’s 2 Manhattan West, a 59-story office tower under construction at 401 West 31st Street.
The biggest deal of the month was NBCUniversal Media’s extension of its 334,000 square foot lease at 1221 Sixth Avenue from Rockefeller Group in Midtown. Other notable leases included the 158,000 square foot agreement of the Venable law firm at the Durst Organization’s One Five One at 151 West 42nd Street in Midtown; Verizon’s 143,000-square-foot Essex Crossing lease, a $ 1.5 billion Lower East Side project at 155 Delancey Street developed by L + M Development Partners, BFC Partners, Taconic Investment Partners, Prusik Group and Goldman Sachs Urban Investment Group; and the 107,000-square-foot lease of home-buying start-up Orchard Technologies at 195 Broadway from L&L Holding Company in the downtown area.