Manhattan Office Leasing Plunges By 40% In Oct
USA – The latest report from Colliers showed that office rental activity in Manhattan plunged by 40 percent in October compared to the prior month. On an annual basis, it significantly declined by 41 percent, reported GlobeSt.com on Wednesday (2 November, SGT).
Year-to-date, total office leasing volume reached 25.77 million sq ft – the lowest figure since May 2021. Nonetheless, it’s 35.4 percent higher than the 19.03 million sq ft recorded in October 2021.
However, the office availability rate in Manhattan edged up to 16.8 percent, a 0.4 percentage point uptick and the highest monthly increase since December 2021.
In particular, the office availability in Midtown South grew by 0.5 percentage points to 16.1 percent and was the first month-on-month gain since April 2022, while that in Downtown Manhattan climbed by 0.2 percentage points to a record high of 20.4 percent.
Anchin’s Co-head of its property group Rob Gilman shared that firms with expiring office leases are taking up significantly less office space than before amidst a potential economic downturn.
“We have seen a reduction in space being leased on renewals while employees are still working remotely but the added concern of a recession has cut the renewal space even more.”
“I see companies saying that if things turnaround they will take more space in future, even if not in same building. They are too concerned on current exposure to commit to larger spaces,” he explained.
Meanwhile, Cadre’s investment specialist David Vincent said the latest figures from Colliers indicate that the office market of New York City is still languishing from the COVID-19 pandemic.
In fact, last week’s data from security firm Kastle Systems showed that on average around 47 percent of employees go to their workplace, with the number ranging between 26 percent and 57 percent depending on the day.
“Though NYC is still working through office vacancies and a lacklustre leasing environment, we are seeing significantly different trends in other markets,” Vincent said. For instance, the office attendance rate as per Kastle Systems in Austin ranges from 44 percent to 72 percent.
“This highlights that the hybrid model is alive and well for many companies and many of the high growth markets that benefited from the population migration during the pandemic are proving more resilient than the nation as a whole,” he added.