New York City's office construction pipeline is starting to contract. A new report from Commercial Edge has taken a close look at new construction starts in the last several years to forecast the trajectory of new supply. Since the beginning of 2021, developers have started new projects totaling a mere 2.1 million square feet, signaling a contraction in new construction activity, according to the report.

Already, new construction is trailing new deliveries. With 19 million square feet of office product under construction in Manhattan, the vast majority of which was started prior to 2021, new deliveries in 2022 and 2023 will surpass new supply in 2020 and 2021, increasing the current office stock by about 4%. However, with new start decreasing, new supply deliveries will likely begin to plummet in 2024 and continue to fall through 2027.

To put the new construction starts stats into perspective, Commercial Edge notes that there were 3.2 million square feet of office starts in 2019 and 5.7 million square feet of office starts in 2020. With only 2.1 million square feet of new starts since the beginning of 2021, including the first months of this year, it is easy to see how construction activity is waning. In the last six months, the total amount of new office space under construction fell by 10 million square feet.