NEW YORK – The Manhattan office market posted 6.1 million square feet of leasing in Q1 2022, a relatively slow start to the year after the two consecutive quarters of growth that closed 2021, according to a new research report from Transwestern Real Estate Services.
The quarter’s leasing total was driven by at least 15 leases exceeding 50,000 square feet. Notably, many of the larger leases signed were for terms of 10 to 15 years or longer, a shift from short-term leases seen during the pandemic shutdown. Despite the fairly healthy leasing activity, absorption levels turned negative, due in part to large-block direct space additions in new and renovated properties.
“While Manhattan’s overall availability increased to 18.5% this quarter, we continue to see stronger market fundamentals as companies better understand their immediate and long-term space needs in the city,” said Chase Gordon, Transwestern Senior Vice President. “This remains especially true in the Class A market where we are seeing landlords push rents due to a renewed sense of optimism.”
Additional highlights from the report include:
- Leasing activity of 6.1 million square feet is a drop from Q4 2021, though a large improvement over the first frame last year.
- There was 2.1 million square feet of negative absorption during the quarter.
- Availability increased 0.6 percentage points to 18.5%, the highest level in a decade.
- Sublet availability is 23.3% of the total figure, a slight quarterly increase, but below pre-COVID levels.
- Average asking rents fell 0.6% to $68.65 per square foot, marking eight consecutive quarters of decline.
“Historically, Q1 tends to be fairly slow in Manhattan, with comparatively weak demand, so from that perspective the quarter’s results aren’t that surprising,” said Corrie Slewett, Research Manager at Transwestern. “Though the momentum from the past two quarters wasn’t continued, there are still signs of a strengthening office market. Many of the large leases signed during the quarter have lease terms longer than 10 years, which is a strong indicator of confidence in the market.”
Download the Q1 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, and investment management. 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
