NEW YORK CITY – The Manhattan office market posted 7.5 million square feet in leasing activity during second quarter 2024, bringing the year-to-date total to 13.3 million square feet, a strong comparison to 10.8 million square feet for the first half of 2023. The market’s availability rate inched up, as did average asking rental rates, according to research from Transwestern Real Estate Services (TRS).
“The increased touring activity over the past several months translated to leasing transactions this quarter, especially in submarkets like Grand Central, where several large leases were signed, resulting in the submarket experiencing tightening availability,” said Lauren Davidson, Senior Vice President, Transwestern. “As 2024 continues, we expect to see market fundamentals remain favorable to tenants, as owners offer attractive concession packages, particularly from Class B assets as they try to compete.”
Additional notable results from the report include:
- The quarter’s 7.5 million square feet in leasing activity was driven by almost 20 leases exceeding 50,000 square feet, including a half dozen that topped 100,000 square feet.
- Notable leases in the quarter included Bloomberg (947,800-square-foot renewal in Midtown); American Eagle (337,100-square-foot mix of sublet and direct in Midtown South); Covington & Burling (235,500-square-foot sublease in Midtown); and Stripe (145,100-square-foot sublease in Downtown).
- Net absorption for the quarter was negative 292,131 square feet. While still in the red, it was much stronger than last quarter’s negative 2.7 million square feet.
- Asking average rents for Class A space topped $80 per square foot for the first time since late 2020, while overall asking rents increased for the second straight quarter to $76.40 per square foot.
- Rents are just 6.2% below their first quarter 2020 peak and are on a streak of nine quarters of year-over-year rent growth.
- Overall availability edged up to 19%, with sublease space on the increase and direct availabilities unchanged quarter-over-quarter.
“Leasing activity this quarter returned to a healthy level, driven by a large number of leases topping 50,000 square feet, which were spread across Manhattan, with the Midtown submarket notching the most,” said Corrie Slewett, Research Manager, Transwestern. “There was not much sharing between Class A and Class B assets, however. Class A assets recorded 1.1 million square feet of positive absorption compared to negative 1.4 million square feet for Class B, in one of the clearest demarcations in a while.”
Download the Q2 2024 Manhattan office report here.
About Transwestern Real Estate Services
Part of the Transwestern companies, Transwestern Real Estate Services (TRS) strives to add value for investors, owners, and occupiers across all commercial property types. Fueled by a holistic perspective of the real estate life cycle, agility and creativity are hallmarks of our approach, while vast national resources and sound market intelligence underpin customized recommendations and property solutions.
Four dynamic, integrated companies make up the Transwestern enterprise, giving us the perspective to think broadly, deeply and creatively about commercial real estate. Clients and investors rely on us for expertise that spans institutional and opportunistic investment, development, hospitality, and brokerage and asset services. Our award-winning, collaborative culture empowers team members with resources and independence to work across boundaries in pursuit of innovative solutions, reinforcing a reputation for service excellence that translates to measurable results. Through offices nationwide and alliance partners around the globe, we positively impact the built environment and our communities while fostering a work climate that champions career vitality for all. Learn more at transwestern.com and @Transwestern.
Media Contact:
Dan Foley
508.272.0017
dan.foley@transwestern.com
twmediarelations@transwestern.com
