Although supply continues to outpace demand, a recent report by Colliers showed inquiries for Manhattan office leasing more than doubled since last year. Leasing activity is currently 25% down from 2019, a substantial improvement from 2020, which saw leasing activity down 50%. In 2021, leasing activity was down 40%.
Manhattan’s office leasing availability rate has been stable since March, at 17.3%, but overall availability has grown by 73.2% since Covid-19 was declared a pandemic in March 2020. The report noted that when the market reaches a 10% availability rate, it will experience recovery.
Midtown’s availability rate, at 16.5%, was lower than Midtown South’s, at 16.8%, for the first time since 2002, according to the report. Demand is being driven by tenants seeking Class A, newly constructed or renovated spaces; the hope of workers returning to the office; and Covid’s move from a pandemic to an endemic stage, experts say. There has also been a shift away from short-term leases to longer-term ones and pent-up demand is helping drive the market.
It is still unclear when office leasing will return to pre-pandemic levels, but things are trending in the right direction.
Source: Crain’s New York Business
