The Real Deal New York

Manhattan’s office leasing market had a record year in 2018

32M sf of deals was best since 2000: CBRE
By Rich Bockmann | January 04, 2019 09:30AM

From left: Tishman Speyer’s Spiral at 66 Hudson Boulevard, 441 Ninth Avenue, 1271 Sixth Avenue

Though other real estate sectors struggled in 2018, it was a record-setting year for Manhattan’s office-leasing market.

Leasing activity – which includes new deals and expansions – hit 32.4 million square feet last year, the highest annual total since 2000, according to CBRE.

At the turn of the century, Manhattan saw 33.1 million square feet of deals, and over the past 10 years the average has been 25.8 million square feet. Last year’s total surpassed that average by 26 percent.

The strong economy and – until recently – a booming stock market helped drive business growth. And expanding office employment helped buoy the year’s numbers.

Large corporate users made big moves in the year, including Pfizer’s planned relocation to Tishman Speyer’s Spiral building in Hudson Yards, Peloton’s lease at 441 Ninth Avenue and Latham & Watkins’ deal at 1271 Sixth Avenue.

Financial service firms inked the lion’s share of deals, accounting for 28 percent of Manhattan’s leasing activity. And activity among co-working firms – which usually accounts for 2 to 4 percent of the market – surged to 18 percent of leasing activity in 2018. Tech companies accounted for 10 percent of leasing volume, while law firms inked 8 percent of activity.