NEW YORK CITY – The Manhattan office market posted 5.9 million square feet in leasing activity in the fourth quarter of 2022, bringing the 2022 total to 29.7 million square feet, 8% higher than the 2021 figure, according to research from Transwestern Real Estate Services (TRS).
Despite the low leasing total, average asking rents increased to $72.79 per square foot, an increase of 5.4% from the end of 2021 and up 2% from the third quarter of 2022. Each major submarket in Manhattan saw average rents increase, with Midtown South asking rates surpassing Midtown for the first time on record.
“As we continue to move through 2023, it will remain a historically great time for tenants to leverage the market,” said Rory Murphy, Partner, Transwestern. “We ended 2022 with a slower leasing quarter than anticipated, as broader economic uncertainty made decision-making and real estate planning more complicated. While we continue to see an overall flight to quality pushing Class A rents, we are simultaneously seeing landlords reach as it relates to concession packages and net effective rents.”
Additional notable results from the report include:
- The fourth quarter leasing total was the lowest quarterly total since the second quarter of 2021.
- Ten leases exceeding 50,000 square feet were signed during the year’s final frame.
- Absorption for the year was negative 2.8 million square feet, much better than 2021’s total of negative 15.8 million square feet.
- All three major submarkets experienced negative absorption, contributing to availability rates rising to 18.5%.
“There had been a fair amount of optimism heading into the final quarter of 2022, based on the third quarter results and the market indicators,” said Corrie Slewett, Research Manager, Transwestern. “While that optimism didn’t fully materialize, there were still bright spots to be found, including rent increases across each major submarket, which indicates market strength and a certain level of confidence.”
Download the Q4 2022 Manhattan office report here.
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
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dan.foley@transwestern.com
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