Manhattan Office Leasing Hit New Pandemic High In August
Manhattan had its most active month of office leasing since the coronavirus pandemic in August, further showing just how many deals can get done from the Hamptons.
Leasing volume hit its highest level since January 2020 at 2.4M SF, but it did little to curtail the flood of office space hitting the market — availability is up 69% since then, according to Colliers' August office market snapshot.
This supply issue is anticipated to become even more dire over the next year, with big office spreads coming onto the market via new construction or expiring leases. Last quarter alone, 115K SF became available at The Durst Organization’s 655 Third Ave. in Midtown and 61K SF at George Comfort & Sons Inc.’s 498 Seventh Ave. in Midtown South was put on the sublet market, according to Colliers. Several Downtown spaces ranging from 50K SF to 99K SF were also listed on the sublet market.
Availability in August was down slightly, to 16.9% from a record-high 17.1% in July, according to Colliers. The largest deals of the quarter Colliers tracked were French finance company Credit Agricole taking 167K SF at the Paramount Group’s 1301 Sixth Ave. and financial advisory firm BDO USA taking 143K SF at the MetLife Building, owned by Tishman Speyer.
The supply rush continues to push rents down — it was $72.68 last month, down 7% from $78 in August 2020, per Colliers. The delta variant has stoked further uncertainty in the return to the office as major companies push back their return dates, but experts say it is not currently impacting lease signing.