Office availability in Manhattan remained flat at 17.1% in July. As a result, asking rents inched downward to their lowest rates in years despite leasing volume increasing +15%.
Office Vacancies Held at Record-Lows, Rents Dipped & Leasing Volume Jumped in July
Office availability in Manhattan continued to remain at a record-low of 17.1% for the third consecutive month in July. Simultaneously, leasing activity rose at the same time subleasing activity increased.
According to Colliers International, a commercial real estate and business brokerage company, Manhattan office leasing volume was up +15% m/m in July.
Leasing volume in Manhattan increased to 2.35M square feet per month in July 2021. Compared to leasing volume of 1.56M in June 2020, this is a good sign however, 2.35M square feet/month during the month of July is well below the five-year rolling average of 8.27M/square feet.
Subleasing Activity Also Up
Net sublet availability in July increased to 21.61M square feet. This is the highest amount of sublet availability, +1.8 times, since the onslaught of the pandemic, according to Colliers.
Asking Rent Hits Four-Year Low
The average asking rent for available office space in Manhattan in July was $72.72/square foot. This asking price of $72.72 represents a nearly -8% drop in asking rent from one year ago and is also the lowest average asking rent level since 2017.
Clearly, this drop in asking rent reflects the fact that demand is far short of supply, according to Franklin Wallach, Collier’s senior managing director for Nw York research. Wallach’s conclusions about demand being short of supply are backed up by data from Kastle Systems which indicated that only 21.4% of Manhattan’s office workers were going into their offices as of June 23.
Downtown Submarket Set Record-High for Office Availability in July
Manhattan’s Downtown submarket set yet another record-high for availability in July at 18.3% More than 100,000 square feet were added to this market at 88 Pine Street and another 81,000 square feet at 110 William StreetThere were two large leases signed in July…one for 400,000 square feet and one for 313,000 square feet.
Thanks to The Real Deal.