Manhattan Office Leasing Subsides in November

Office leasing activity in Manhattan was tepid in November, as overall leasing volume dipped to 2.13M SF, a drop of nearly 18% from October’s total of 2.6M SF.

Driving the downturn in overall volume was a plunge in activity in the Downtown submarket, which dropped to 108K SF from October’s total of nearly 776K SF. According to Colliers’ new monthly snapshot for Manhattan office market.

Leasing activity in Midtown and Midtown South actually notched modest increases in November, growing to 1.09M SF and 938K SF, respectively, from October’s tallies of 985K SF and 835K SF.

Unlike October, which saw two separate deals of more than 250K SF, the largest lease transactions in Manhattan in November were a bit smaller: Denton’s 159K SF renewal at 1221 Avenue of the Americas; Palantir’s 140K SF renewal at 620 Avenue of the Americas, a space formerly occupied by WeWork; and Ralph Lauren’s 133K SF renewal at 650 Madison Avenue.

The availability rate of 17.9% matched September’s record high in Manhattan in November, while overall net absorption in the borough was negative 500K SF, Colliers reported.

The year-to-date 2023 leasing total of 23.7M SF in November is about 13% below the same period in 2022, ensuring that the total for 2023 will fall short of last year’s tally.

Net sublet availability grew in November in Manhattan for the first time since may, increasing by 51K SF to 20.75M SF. The average asking rent in Manhattan dipped by 0.5% in November to $75.02 per SF, which is 5.6% lower than the March 2020 average of $79.47 per SF.

The leasing volume in Lower Manhattan was the lowest monthly total Downtown since February 2021, a reflection of the fact that demand in the submarket in October was mainly driven by one transaction, the City of New York’s 538K SF lease at 150 William Street. The largest Downtown lease in November was Payoneer’s new 42K SF deal at 195 Broadway.

With a November leasing volume total of nearly 940K SF, Midtown South notched its strongest tally since January, a 12.4% jump in velocity from October. The November leasing total in Midtown South jumped 62.3% in a year-over-year comparison; the total also was 11.6% above the five-year rolling average of 840K SF.

The addition of the below-average priced sublet block at 155 Delancey Street, the removal of above-average priced space leased to Quinn Emanuel at 295 Fifth Avenue and lower-repricing in Midtown South resulted in the asking rent average decreasing by 0.1% in November to $81.67 per SF. However, the average grew by 4.8% since March 2020.