Manhattan Stands Out in Ranking of Office Demand

US office demand was stable in November, but Manhattan and other markets showed strength, according to a report from CBRE.

The US Tenants in the Market (TIM) Index was unchanged in November at a level of 85 while half of the 12 markets tracked by CBRE reached TIM Index levels of over 90, a new milestone toward pandemic recovery.

Manhattan was one of the standouts, ranking third among the 12 largest cities in the country for office market recovery in November with multiple measures of demand showing steady progress.

The East Coast office center showed an increased volume of leasing activity as companies actively searched for new space, the CBRE study noted.

“With space requirements at 99% of the pre-pandemic level and signed leases surpassing the pre-Covid number, companies demonstrated clear confidence in the Manhattan office market during November,” said Nicole LaRusso, CBRE Senior Director of Research & Analysis. “A slow but steady decline in sublease space also shows that the Manhattan office market is continuing to improve.”

Manhattan’s sublease availability fell in November for the sixth consecutive month of reduction.

“While available sublease space was 86% above the pre-pandemic level, the improvement was the result of solid subleasing activity and above-average withdrawals outpacing sublease space additions,” a CBRE report noted.

In addition to Manhattan, CBRE cited Boston as another leader in the recovery from the pandemic.

Although Boston’s TIM index level fell by 11 points to 123, it remained the highest of all 12 markets tracked by CBRE

After a 6-point upward revision to the October index level. Boston (209) had another stellar month in leasing activity, improving by 38 points and topping the list of 12 U.S. markets once again.

In October, CBRE called Boston “the leading office market in the country.”

Research from CBRE showed that Boston has strong Tenants-in-the-Market Index and leasing activity ranks, and the city is currently exceeding its pre-COVD activity in September. At the same time, the market has a shrinking availability of sublease space, three trends that are spelling good news for the office recovery.

The life science industry is driving a lot of the new office demand. Boston is one of the three major life science hubs in the country, and it will likely continue to fuel office activity for the next several years. “Boston’s thriving life science industry is the anchor in the city’s recovery,” LaRusso said, “As the summer’s COVID surge fades into the distance, and vaccination rates continue to climb, we are cautiously optimistic that the improvement in office demand will build through the end of 2021 and into 2022.”