Co-working has tripled its share of Manhattan’s office-leasing activity over the past year: report

Tenants inked 12 percent of the 25 million square feet worth of leases signed through the first three quarters of the year

TRD New York /
Oct.October 01, 2018 08:15 AM

Amol Sarva, Adam Neumann and Ryan Simonetti

With companies like WeWork, Knotel and Spaces gobbling up real estate to feed their voracious expansion plans, co-working and flexible-space tenants have tripled their share of Manhattan’s office-leasing activity over the past year.

Co-working tenants inked 12 percent of the nearly 25 million square feet worth of leases signed in Manhattan through the first three quarters of the year, according to Avison Young. That’s up from 4 percent during the same time period last year.

Mitti Liebersohn, president and managing director of Avison Young’s New York City operations, said the stronger leasing activity “reflects that co-working operators are now securing leases in Class A buildings as well as Class B and C properties, a trend we saw across all markets in the third quarter.”

WeWork, for example, recently signed a nearly 80,000-square-foot expansion at 85 Broad Street in the Financial District, where it’s launching its “WeWork Wellness” gym. The company, which is backed by SoftBank and reportedly seeking new funds at a $35 billion valuation, is now Manhattan’s largest private office tenant with a portfolio totaling 5.3 million square feet.

In Midtown South, co-working companies accounted for 45 percent of the 1 million square feet leased during the third quarter, overtaking the 23 percent of leases signed by the submarket’s traditional tenants in the technology, advertising, media and information-services (TAMI) sector.

All of that co-working activity may give some pause for concern, though. A recent study by Cushman & Wakefield found that investors consider properties with large exposures to WeWork as riskier bets than those with smaller percentages leased to the company.


Related Articles

arrow_forward_ios
(Photos by Sylvia Varnham O'Regan, Getty)

After looting, BIDs reverse guidance on boarding up stores

After looting, BIDs reverse guidance on boarding up stores
“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think

“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think

“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think
Clockwise from bottom left: Robert Reffkin of Compass, John Gomes, Scott Rechler of RXR Realty, Rich Barton of Zillow, Gary Keller of Keller Williams and Don Peebles of The Peebles Corporation (Getty)

“America is in crisis:” Real estate leaders address George Floyd protests

“America is in crisis:” Real estate leaders address George Floyd protests
A mass timber project in Cleveland is now under construction and could be the nation’s tallest when completed. Harbor Bay Real Estate Advisors’ Intro development will rise nine stories with 298 residential units (Credit: Harbor Bay Real Estate Advisors)

Mass timber project in Cleveland could be nation’s tallest

Mass timber project in Cleveland could be nation’s tallest
Joy Construction’s Eli Weiss (left), Maddd Equities’ Jorge Madruga (top), and Drew Katz with 20 Bruckner Boulevard in the Bronx (Getty; Google Maps)

“Dream” comes true for long-vacant Bronx ice house

“Dream” comes true for long-vacant Bronx ice house
“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space

“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space

“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space
Frederick Arnold, formerly of Convergex and Alex Dimitrief, formerly of General Electric (Getty, Twitter Navient)

Tensions brew on WeWork’s board with appointment of new members

Tensions brew on WeWork’s board with appointment of new members
Industrious' Mary Hogan Preusse and CEO Jamie Hodari (Twitter)

Industrious adds first female board member and eyes IPO

Industrious adds first female board member and eyes IPO
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...