Scorecard: The steady decline of Manhattan office leasing

A monthly roundup of news and reports on the commercial market

New York /
Sep.September 28, 2016 08:00 AM

Manhattan office leasing slowed by 23 percent over the past two months compared with the same period a year earlier, and is down 39 percent from 2014, an analysis of CoStar Group data revealed.

Tenants inked 476 deals covering 3.4 million square feet between July 1 and August 24 in Manhattan, down from 5 million square feet during that same period last year and 6.2 million square feet in July and August of 2014.

Leasing has slowed overall, but some said smaller tenants are tightening the purse strings more than others. “We are seeing a lot more reticence to [make] decisions on new space for smaller companies,” Douglas Linde, president of office landlord Boston Properties TRData LogoTINY, said during a second-quarter earnings call in late July.

 

Yet, shared space behemoth WeWork continued to ink deals. It’s now targeting Manhattan’s most expensive office market, The Plaza District, where it signed a lease for 159,300 square feet last month.

 

Over the past six months, SL Green Realty, Vornado Realty Trust, Boston Properties and Empire State Realty Trust all mentioned WeWork in earnings calls.

An analyst asked SL Green’s CEO Marc Holliday last month if the approximately 3 million square feet WeWork has under lease in New York made him nervous.

“It is not something that keeps us up at night,” he said.

 

Correction: Because of an editing error, an earlier version of this story did not identify WeWork in one of the sentences.


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