The Manhattan office market showed strong performance in October with a total leasing area of approximately 3.6 million square feet, surpassing last year’s total to reach 33.7 million square feet so far this year, according to the latest data from commercial real estate consultancy firm Colliers International. It is expected to exceed 40 million square feet by the end of the year, marking the first time since 2019.
One of the most notable transactions this month was the international law firm Ropes & Gray renewing its lease for 377,000 square feet of office space at 1211 Sixth Avenue.
In addition, investment firm Sixth Street signed a lease for approximately 103,000 square feet at “The Spiral,” a landmark office building in Hudson Yards, making it the fifth-largest transaction in October.
Although the leasing area in October saw a slight decrease compared to the same period last year, it remained significantly higher than the average level of the past decade (270,000 square feet per month).
Colliers International’s report indicated that the office vacancy rate in Manhattan has dropped to 14.3%, marking the 20th consecutive month of declining or stabilizing vacancy rates. The average asking rent has increased to $75.18 per square foot, the highest level in two years.
Midtown remains the hottest area for leasing activities, with transactions of around 1.5 million square feet. The vacancy rate in the area has dropped to 13%, and the average asking rent has risen to $81.57 per square foot.
Downtown market also experienced a significant rebound, with transactions of approximately 687,000 square feet, showing significant increases both monthly and annually. The vacancy rate dropped to 17.5%, and the average rent increased to $59.52 per square foot.
Crain’s NY Business pointed out that if the current trends continue, Manhattan’s leasing activity this year is expected to set a post-pandemic record, indicating that large companies are re-stabilizing the office leasing market driven by the “Return-to-Office” policy and demand for high-quality spaces.