July 27, 2018
New York – Manhattan’s office market shook off a sluggish start to 2018 with a strong second quarter, recording more than 10 million square feet of leasing during the period, the highest quarterly figure since 2014, according to Transwestern’s second quarter 2018 report. There were 22 new leases exceeding 50,000 square feet, including nine that topped 100,000 square feet.
Manhattan posted just under 300,000 square feet of positive absorption in the quarter, bringing the year-to-date total to negative 1.4 million square feet. The market’s availability rate remained steady at
“The Manhattan market had a fairly robust quarter of leasing that brought it to 17 million square feet leased year-to-date, a figure that’s up 8 percent since the same period last year,” said Danny Mangru, Research Manager in Transwestern’s New York office. “The leases didn’t have a strong impact on the net absorption figure because much of the space was either preleased or was not officially on the market. The TAMI and law sectors were the most active, accounting for more than half of the transactions exceeding 100,000 square feet.”
Highlights from the report include:
- Average asking rents in Manhattan are at an all-time high of $74.36. This is up from last quarter’s average of $74.04 and up 3 percent from a year ago.
- The average deal size of new leases almost exceeded 50,000 square feet, a sizeable increase of 25 percent from last quarter.
- Eleven blocks of space exceeding 100,000 square feet were added to the market, with nine in Midtown and two in Downtown.
- Midtown South witnessed the greatest drop in availability, with robust leasing and no significant new availabilities, pushing the rate to 9.4 percent from 9.8 percent last quarter.
- Most areas posted positive net absorption, except for Downtown, where seven large blocks of space exceeding 50,000 square feet were added.
- There is currently 14.2 million square feet of office space under construction, with a sizable portion already preleased.
- At the mid-year mark, sales volume is at $8.5 billion, up 10 percent from last year, with an average price of $991 per square foot.
Download Transwestern’s full second quarter 2018 report at: https://transwestern.com/market-reports
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Kelsey Da Silva