Press Releases

Despite Decline, Rental Rates Remain Within 7.2% Of Peak

January 22, 2021

New York City – Manhattan’s office market continued to experience distress in the fourth quarter, posting very low levels of leasing, decreasing rent rates and increasing availability levels, according to a new research report from Transwestern Real Estate Services (TRS).

“Most clients are understandably exhibiting a ‘wait and see’ approach during the pandemic as tenants and landlords determine what their next steps will be,” said Patrick Heeg, Transwestern Partner. “The down market, while reflective of the overall economy, also provides significant upside for tenants seeking to make moves over the next few quarters. There is tremendous opportunity in the market right now, with fundamentals trending to favor tenants.”

Manhattan leasing activity totaled just over 3 million square feet in fourth quarter 2020, the lowest quarterly total since at least 2006 and a 77% decrease year over year. The quarterly leasing figure is more than 50% below the five-year average of 8.7 million square feet. Similarly, the leasing totals for the year were down sharply. At 19.3 million square feet, the 2020 leasing total was down 52.8% compared to 2019, 45% below the five-year annual average of 34.7 million square feet, and well below the 2007 and 2008 recession totals of 25.8 million square feet and 24.6 million square feet, respectively.

Eight leases were signed during the quarter that were in excess of 50,000 square feet. The two largest new leases signed during the quarter were subleases, with Apple taking 116,500 square feet at 11 Penn Plaza and Noom capturing 113,000 square feet at 5 Manhattan West.

Additional highlights from the report include:

  • Market-wide availability reached 14.8%, the worst quarterly level since at least 2004.
  • Sublet availability continued to increase, closing the quarter at 3.9% and accounting for 26.5% of the total availability.
  • Manhattan posted negative 6.6 million square feet of absorption in the fourth quarter, pushing the 2020 total to negative 16 million square feet, far below the negative 2.2 million in 2019.
  • Asking rents in Manhattan fell 3.4% in the quarter to $75.63 per square foot, the lowest level in two years, though still within 7.2% of the peak seen in early 2020.

“There is no avoiding the fact that 2020 was challenging for the Manhattan office market; however, it was not as dire as many of the predictions had suggested,” said Corrie Slewett, Research Manager at Transwestern. “Leases are being signed, rents have slid only minimally from their peak, and an increase in transit ridership from third quarter indicates more workers are returning to their desks. As the vaccine rolls out to greater portions of the population, commercial real estate activity should begin to improve.”

Download the fourth quarter 2020 Manhattan office report at

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. An integrated approach formed from fresh ideas drives value for clients across commercial real estate services, development, investment management and opportunistic programs for high-net-worth investors. The firm operates through 34 U.S. offices and global alliances with BNP Paribas Real Estate and Devencore. Learn more at and @Transwestern.

Media Contact:
Dan Foley

Patrick Heeg


New York, New York

(212) 537-9002