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Manhattan’s Q4 leasing activity is off to a slow start thanks to a quiet October
Activity is positive YTD, but October fell by more than one-third from the same time in 2015: Colliers
Leasing activity in Manhattan’s office sector is still above where it was last year, but October wasn’t so hot.
The fourth quarter is generally when some of the largest leases are finalized, and Manhattan saw some big ones last month with Major League Baseball and the National Basketball Association.
Landlords signed 2.05 million square feet worth of deals in October, according to data from Colliers International [TRDataCustom], but that was down more than a third from last October.
“It’s no surprise that in the fourth quarter of 2015 we saw some large leases,” senior research director Franklin Wallach said. “It’s really just a matter of when they ink the deal. Some leases are finalized just shy of New Year’s.”
Manhattan leasing activity stood at 28.13 million square feet year-to-date at the end of October, up 5.4 percent through the first 10 months of 2015.
And November’s not off to a bad start. On its quarterly earnings call Wednesday, Brookfield Property Partners teased it was getting ready to announce a new tenant at 1 Manhattan West. Bloomberg News’ David Levitt tweeted later that evening that the National Hockey League – which had been rumored to be negotiating on 160,000 square feet at the 67-story tower – will be making the move to Brookfield’s Far West Side megaproject.
It’s the latest in a series of big-league deals signed recently. MLB late last month finalized its long-anticipated 386,000-square-foot lease at 1271 Sixth Avenue. And a few days later the NBA signed a 19-year lease extension for 175,000 square feet at 645 Fifth Avenue.
Year-over-year leasing activity in Midtown held relatively steady, down just 8.2 percent compared to last October. In Midtown South, however, there was a dramatic drop-off.
Leasing activity totaled 420,000 square feet in October, down more than 50 percent from the same month last year. The largest deal last month was the Turkish trade group TTC USA Consulting’s 28,000-square-foot lease at 10 East 34th Street.
It was just one of two leases larger than 25,000 square feet in the supply-constrained Midtown South submarket, where the availability climbed slightly from September to 8.2 percent with the addition of about 200,000 square feet of space in new boutique office buildings 412 West 15th street and 540 West 26th Street.
“No question. Midtown South is supply-constrained,” Colliers executive director Craig Caggiano said. “When you don’t have big deals – and you’re talking about the largest deal in October was 28,000 square feet – it’s hard to generate robust leasing activity.”