NEW YORK CITY – The Manhattan office market posted one of its strongest quarters since the start of 2020, tallying 7.8 million square feet in leasing activity in Q3 2022, including 16 transactions exceeding 100,000 square feet each. Most of the large leases involved expansions and many were for lease terms of 15 years or longer, both signaling ongoing confidence in the nation’s largest office market, according to research from Transwestern Real Estate Services.
The quarter’s leasing total was slightly lower than Q4 2021’s 9.6 million square feet, though 2022’s year-to-date leasing total stands at 22.3 million square feet, which is 23 percent and 28.7 percent higher than the same periods in 2021 and 2020, respectively. There was 1.6 million square feet of positive net absorption during the third quarter, the strongest total since 2018, while asking rents dropped slightly from second quarter but increased year-over-year.
“The third quarter results carry optimism around the Manhattan real estate market. We are seeing that most companies want a place for team members to gather weekly to maintain culture, creativity, and productivity, while employees embrace the opportunity for greater collaboration,” said Lauren Davidson, Senior Vice President, Transwestern. “The statistics reflect this notion that companies want a New York City presence. Anecdotally, even with this growing momentum, our team is still seeing great opportunity for tenants focused on a long-term commitment to the city.”
Additional highlights from the report include:
- The 16 leases exceeding 100,000 SF were spread across Manhattan’s three major submarkets.
- The Midtown submarket had 17 new and expansion leases exceeding 50,000 square feet, compared to only 10 in third quarter 2021.
- Year-to-date absorption remains in the red, at negative 450,700 square feet.
- Overall availability declined for the second straight quarter, down from 18.5% to 18.1%.
- Asking rents notched their second straight quarter of annual growth, up 1.4% since third quarter 2021 to $71.34 per square foot.
- Asking rents ticked down slightly from last quarter’s $72.03 per square foot, due to high-priced space being leased and removed from the market.
“The Manhattan office market has traditionally been backloaded, with upticks in activity during the fourth quarter,” said Corrie Slewett, Research Manager, Transwestern. “If this year holds true, we’ll have put together a very strong three quarters to close out 2022, with each quarter building on its predecessor. There is still some caution in the market, with deals taking longer to close than pre-2020. But that’s more than countered by the increasing lease terms that we’ve been seeing.”
Download the Q3 2022 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, investment management, and opportunistic endeavors for high-net-worth investors. 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.
Media Contact:
Dan Foley
508.272.0017
dan.foley@transwestern.com
twmediarelations@transwestern.com
Corrie Slewett
Research Manager - New York | National Tenant Advisory Research Leader
New York, New York
