Overall, office space leasing activity grew across New York island by as much as 16 per cent in the 12-month period, to the surprise of many observers, and to reach levels not seen in over a decade.
According to Cushman’s latest figures, 30.1 million square feet of Manhattan office space was reportedly left last year, with the headline vacancy rate falling from 10.5 per cent to 9.1 per cent.
By way of explanation for the positive showing, Joe Harbert, Cushman’s chief operating officer for the New York metropolitan area, said: “You had pent-up demand coming out of the recession.
“Corporations realised that, relative to the past market, this was a market in which a company go could go out and, for a reasonable price, see a lot of alternatives and find high-quality space,” he is quoted as saying by Bloomberg.
Manhattan is, of course, a key market for the wider New York office space sector, which is, in turn, a crucial indicator of performance within the US real estate industry and the national economy as a whole.
There has been widespread concern that the continuing economic crisis in the Eurozone would severely dampen optimism and office renting activity among financial service companies in New York. However, performance in this context has so far been notably resilient.
New York City’s reputation as a centre for financial sector operators is well established, but significant efforts are being made to develop its position as a hub of technology innovation and business development. A series of office ‘incubators’ have been established across the city to encourage the progress of tech-based start-ups, while global tech brands like Twitter have set up new offices in New York in recent months.
Editor’s notes: The total year take-up of office space through leasing deals in Manhattan in 2022 was 29.11 million square feet, higher than 2021’s 24.96 million square feet figure. However, it was 12 per cent lower than the ten-year average of 33.09 million square feet of office space.
In 2023, the total leasing activity for the year finished 6 per cent below 2022, at 27.25 million square feet. At the end of the year, the office availability rate was still at a record high and up 5 per cent over the previous year, with 96.5 million square feet of available space compared to the previous year’s total of 76 million square feet.