Manhattan office leasing activity gathers pace

[Published Oct 2011 and updated July 2023] The rate of office leasing in Manhattan was 28 per cent higher in the first three quarters of 2011 compared with the same period of last year, according to the latest data from Cushman & Wakefield (C&W).

Real estate experts at the firm said that while New York’s office space market will come under pressure in the remaining months of the year but there is growing confidence that any economic headwinds will be comfortably weathered.

New leasing agreements were reached on 24.1 million square feet of office space in Manhattan during the first nine months of the year as New York’s most important business district saw a steep pick up in demand for commercial properties.

The amount of vacant office space in Manhattan at the end of September this year was at its lowest level since February 2009 when New York and the world was still reeling from the collapse of the Lehman Brothers bank and the onset of the financial crisis.

C&W’s report said that Manhattan had a total of 393 million square feet of offices at the end of September, which makes it the largest commercial real estate market anywhere in the US. Indeed, Manhattan is believed to account for roughly 25 per cent of all the central business district office space in the country.

“Through the third quarter, Manhattan commercial real estate fundamentals have strengthened, following the record pace of new leasing activity,” said Joseph Harbert, C&W’s chief operating officer for the New York Metro Region.

“The continued activity suggests that demand for stable, high-quality, well-located assets make New York City a primary investment market,” he added.

In late June C&W revealed details of a relocation deal that saw the American subsidiary of the Tokyo-based finance group Nomura Holdings sign up for 900,000 sq ft of office space at New York’s Worldwide Plaza that is set to be vacated by the Universal Music Group.

Editor’s notes: In the first quarter of 2023, New York City had a total office space inventory of 469,575,735 square feet with a vacancy rate of 16.1%.

The vacancy rates in Downtown Manhattan stood at 22.6 per cent and in Midtown Manhattan they stood at 21.2 per cent.

In Q1 2023, 4.6 million square feet of office space was leased in Manhattan which was a decrease on the previous quarter and the least amount of activity since Q2 2021.

At the time, there was also 13,628,890 square feet of new office space in the 5 boroughs of New York under construction.

Of the U.S.’s total 4,773,646,395 square feet of office space stock (in both CBDs and suburban areas), New York City’s 469,575,735 square feet of stock makes up 9.84%.