Quarterly Absorption is in Positive Territory for First Time Since 2019
October 18, 2021
NEW YORK – Leasing activity reawakened in Manhattan’s office market during Q3 2021, totaling 6.3 million square feet, according to a new research report from Transwestern Real Estate Services (TRS). Additionally, the market posted positive net absorption for the first time since 2019, while vacancy and availability rates both declined during the quarter, providing much-needed good news for the office market.
Average rent rates posted the smallest quarterly decline of the pandemic, dropping 0.5% to $70.35 per square foot, down 10.2% from a year ago and 13.6% off the Q1 2020 peak. Sublet availability, which had surged during the past year, declined to 25.3% of total availability, the lowest ratio since Q2 2020 and closer to pre-pandemic levels.
“The Manhattan office market is continuing to see a rise in activity and an increase in confidence from both landlords and tenants,” said Chase Gordon, Senior Vice President at Transwestern. “Despite the increased activity, tenants are still able to take advantage of current market conditions and aggressive concession offerings.”
Additional highlights from the report include:
- More than 15 leases exceeding 50,000 square feet were signed during the quarter.
- Leasing activity was up 31.2% year-over-year, though is still 33% below the five-year pre-pandemic average of 9.4 million square feet.
- Positive net absorption totaled 100,400 square feet.
- The availability rate dropped 0.2 percentage points from Q2 2021 to 18.0%.
“Compared to pre-pandemic figures, many of these market indicators are not very strong on their own,” said Corrie Slewett, Research Manager at Transwestern. “However, whether it’s quarter-over-quarter or year-over-year, we are seeing significant improvements in the numbers that certainly give reason to be more optimistic for the market’s return to normalcy. The ‘Great Return’ after Labor Day didn’t quite materialize but we are expecting to see continued improvements each coming quarter.”
Download the Q3 2021 Manhattan office report at https://transwestern.com/market-reports.
About Transwestern Real Estate Services
Transwestern Real Estate Services (TRS) adds value for investors, owners and occupiers of all commercial property types through a comprehensive perspective and by providing solutions grounded in sound market intelligence. Part of the Transwestern companies, the firm applies a consultative approach to Agency Leasing, Asset Services, Tenant Advisory + Workplace Solutions, Capital Markets, and Research & Investment Analytics.
The privately held Transwestern companies have been delivering a higher level of personalized service and innovative real estate solutions since 1978. Through an integrated, customized approach that begins with good ideas, the firm drives value for clients across commercial real estate services, development, and investment management. Operating from 33 U.S. offices, Transwestern extends its platform capabilities globally through strategic alliance partners whose unique geographic, cultural, and business expertise fuels creative solutions. Learn more at transwestern.com and @Transwestern