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Manhattan’s office market enjoyed a fairly strong May thanks in large part to Bloomberg’s extension of its sprawling lease at 731 Lexington Ave.
Companies leased just under 3 million square feet of office space in Manhattan overall last month, up 8.4% from April and more than 70% year over year, according to the latest data from Colliers. Roughly one-third of that activity was due to Bloomberg’s roughly 947,000-square-foot lease extension at 731 Lexington Ave., the largest lease in the borough since 2019.
“Naturally, that deal is going to move the needle and have a very big impact on overall leasing volume, but that is always the case in the Manhattan office market,” Colliers Executive Managing Director Frank Wallach said. “The foundation of the Manhattan office market has been and continues to be driven by the tenants under 25,000 square feet.”
Demand for office space in May was higher than the five-year rolling average for the month but still lower than the 2019 monthly average, before the pandemic hit.
The borough’s availability rate was 17.9%, down slightly month over month but up slightly year over year, while the average asking rent was $74.59 per square foot, up compared to April but down compared to May of last year. Available office space has grown by 79.2% since March 2020, to about 96.5 million square feet, according to the report.
Leasing activity in Midtown grew to almost 2 million square feet, up more than 75% compared to April and higher than the monthly 2019 average. The Bloomberg lease played a major role in this surge, as did Bain & Co.’s taking of about 235,000 square feet at 22 Vanderbilt Ave.
But Midtown’s availability rate actually grew slightly, to 16.2%, thanks in part to large blocks of space hitting the market at 1221 Sixth Ave. and 125 W. 57th St. Its average asking rent rose slightly month over month and stayed flat year over year at $78.61 per square foot.
Midtown South saw about 860,000 square feet of leases, down 40% from April but more than double the total from May 2023, the report says. The largest deal for the neighborhood was law firm Herrick Feinstein’s renewal of about 77,000 square feet at 2 Park Ave., where it is relocating within the building. The neighborhood’s availability rate rose to 18.7%, and the average asking rent was $81.11 per square foot, up month over month but down year over year.
Downtown, firms leased about 150,000 square feet, a significant drop month over month and year over year. The neighborhood’s largest deal was Kroll’s subleasing of 48,000 square feet at 1 World Trade Center. Its availability rate did drop to 20.4%, the lowest it has been since February 2023, but its average asking rent fell to $57.04 per square foot, the lowest it has been since 2015, according to Colliers.
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Eddie Small , 2024-06-03 18:26:57
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