October 19, 2018
New York – Manhattan’s office market took a shot in the arm from a very active coworking sector, which accounted for approximately 20 percent of the more than 7 million square feet leased during the third quarter of 2018, according to new research released by Transwestern. Year to date, office occupiers have leased 24.2 million square feet in Manhattan, with the coworking sector taking roughly 15 percent of the total.
Manhattan posted 83,803 square feet of negative absorption in the quarter, bringing the year-to-date total to negative 1.5 million square feet. The market’s availability rate remained steady at 11.4 percent, where it has been for the past three quarters.
“If you had to sum up the third quarter market drivers in one word, it would have to be ‘coworking,’” said Danny Mangru, Research Manager, Transwestern. “It’s become one of the fastest growing market segments we’ve seen in several years. Overall, leasing activity is doing fairly well. While this quarter’s 7 million square feet leased is down from last quarter’s 10 million figure, year-to-date leasing is up 4 percent over last year’s total.”
Highlights from the report include:
- Coworking firms closed 14 leasing transactions this quarter and more than 30 for the year.
- In the third quarter, eight coworking transactions exceeded 50,000 square feet, while four topped 100,000 square feet.
- Across Manhattan, 21 new leases exceeded 50,000 square feet, including eight leases over 100,000 square feet.
- 10 blocks of space over 100,000 square feet and 25 blocks over 50,000 square feet were added during the quarter.
- Midtown saw the greatest drop in the availability rate, down to 10.6 percent from last quarter’s 10.8 percent.
- Downtown witnessed the greatest increase in the availability rate, up to 14.9 percent from last quarter’s 14.4 percent.
- Average asking rent for Manhattan had a marginal increase to $74.50, an all-time high and up
1 percent year-over-year.
Transwestern is a privately held real estate firm of collaborative entrepreneurs who deliver a higher level of personalized service – the Transwestern Experience. Specializing in Agency Leasing, Asset Services, Occupier Solutions, Capital Markets and Research, our fully integrated global enterprise adds value for investors, owners and occupiers of all commercial property types. We leverage market insights and operational expertise from members of the Transwestern family of companies specializing in development, real estate investment management and research. Transwestern has 35 U.S. offices and assists clients from more than 221 offices in 37 countries through strategic alliances with France-based BNP Paribas Real Estate and Canada-based Devencore. Experience Extraordinary at transwestern.com and @Transwestern.
Kelsey Da Silva