Coworking Made Up Nearly One-Third Of Manhattan's Office Leases In August
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Coworking and flexible office space operators are continuing to dominate the New York City office leasing market.
In the first eight months of the year, flexible space companies leased a total of 1.9M SF — which accounts for nearly 10% of all new leases this year, according to a new report from CBRE. Last month, 32% of all new leases inked were for those types of companies, with eight leases taking up 660K SF, according to the report. The world’s most prolific coworking outfit, WeWork, says it is now the biggest office tenant in the city, thanks to a 258K SF lease it signed at TH Real Estate’s 21 Penn Plaza last month.
WeWork now has a total of 5.3M SF under its control, putting it ahead of JPMorgan Chase. WeWork rivals have also been on a leasing spree. In the past week, Convene signed a lease to open a 116K SF facility at RXR Realty’s 530 Fifth Ave., its largest location in the city.
Spaces took 110K SF at the Chrysler Building. Knotel signed four leases in Midtown South across a total of about 31K SF.
There have been predictions that the rapidly expanding coworking sector will soon peak and then begin to contract. There are millions of square feet set to hit the city’s office market, and competition for landlords is tougher than ever.
According to CBRE, the coworking leases are having a positive impact on absorption. Manhattan has seen almost 2M SF of negative net absorption year to date, according to CBRE. But if it weren’t for the flexible office leases, CBRE predicts negative net absorption would have been at 3.7M SF.