New York City office leasing activity showed signs of life in the second quarter. Leasing totaled 3.47 million square feet in the second quarter, a 20% quarter-over-quarter gain. However, leasing activity still fell a significant 44% below the five-year average of 6.14 square feet, according to research from CBRE.

The increase in leasing demand has a direct correlation to the vaccine distribution. According to CBRE, 60% of people in the city have at least one does of the vaccine, which has helped to drive a return to the office and demand for space. Nicole LaRusso, senior director of research and analysis for CBRE Tri-State, says that occupancy has reached its highest point since the start of the pandemic.

So far this year, Manhattan office leasing totals 6.35 million square feet, 23% less than the same period of 2020. The office vacancy rate increased 140 basis points to 18.6% quarter-over-quarter and 650 basis points year-over-year. Although leasing activity climbed, net absorption was negative for both the year and the quarter. Net absorption was negative 6.02 million square feet in the second quarter, bringing the year-to-date total to negative 15.12 million square feet. As a result, asking rents were flat at $75.67 per square foot for the quarter and down 7% for the year.