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Manhattan office demand remains strong as availability rate dips and large transactions bolster leasing activity

Manhattan office demand remains strong as availability rate dips and large transactions bolster leasing activity 10 octobre 2022

Avison Young releases third quarter 2022 Manhattan Office Market Report

New York, NY Avison Young today released its Third Quarter 2022 Office Market Report for New York, showing positive signs of increased leasing activity. Overall, the surge in availability that has risen in quarters past is beginning to slow.  The availability rate saw its first quarter-over-quarter decrease by 18.4%, signaling stronger occupancy.

Additionally, the Report indicates that large transactions continue to bolster leasing activity. Leasing activity reached more than 8 million square-feet (msf), up 17.4% from last quarter. The cumulative leasing activity from Q1-Q3 2022 is 19.9% greater than Q1-Q3 2021. This increase is due to the high volume of large transactions in which 33 deals over 100,000-square-feet (sf) have been signed between Q1 and Q3 (20 in 2021).

“The Manhattan office market is on track to have its best year of leasing activity since 2019 as large transactions continue to bolster leasing,” said Danny Mangru, Innovation & Insights Regional Manager of the firm’s New York City office. ”Avison Young is seeing tenants willing to sign large commitments for longer lease terms than they were last year and as these numbers rise, along with return to office efforts hovering around 50%, we should expect strong demand to continue through year-end.”

The Report also outlines the widening of the gap between class A net effective and base rents, as occupiers in this sector are shifting demand towards higher quality assets. The gap between base and net effective rents has widened from $9.83 per-square-foot (psf) to $18.18-psf. Net effective rents have leveled due to base rents incrementally trending upward along with historically large concessions packages, which are being offered to induce tenant commitments as a strategy to remain competitive.
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For more information:
  • Download 2022 Third Quarter Office Market Insights Report here.
Media Contact:
  • Nathan Reyna, Media Relations & Content Specialist, Northeast: +1.917.877.1697
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