Leases under 20K SF dominating market
There were some mega commercial deals in 2012, coming mostly from the usual suspects — Viacom, Morgan Stanley, Microsoft — but these massive leasing deals account for only 3 percent of leasing activity in a given year. The vast majority of leasing activity in 2012 and during the four years prior were for spaces under 20,000 square feet, according to the New York Observer.
Deals ranging from 1,000 to 20,000 square feet represented a whopping 82.6 percent of the deals signed over the past five years. And as tenants — especially tech tenants — increasing value smaller and higher efficiency spaces, the size of leasing deals will continue to shrink.
From 2003 to 2007, leases under 20,000 square feet accounted for 80.1 percent of the deals closed: an increase of 2.5 percent in the last five years. The rise of smaller leases has also led to a rise in vacancies for massive office buildings. For instance, vacancies in the Sixth Avenue submarket are on track to reach a 20-year high. [NYO] —Christopher Cameron