Leasing activity in the Manhattan office market ended 2015 down 13 percent from the previous year, largely due to sluggish years in Midtown South and Downtown, according to research from Newmark Grubb Knight Frank.
Landlords leased or renewed 36.2 million square feet of office space last year, down 5.4 million square feet from Manhattan’s 2014 total, Newmark’s fourth quarter office report shows.
While Midtown was the busiest it’s been in the past three years, the borough’s two other office submarkets lagged.
With 13 million square feet worth of transactions, activity in Midtown South was down 20.7 percent from last year’s decade-high of 16.4 million square feet.
Because no major space was added to the market, however, Midtown South’s availability dropped to an eight-year low of 7.7 percent at the end of the year. Asking rents averaged $69.51. Google’s 250,000 square-foot lease at RXR Realty and Young Woo & Associates’ SuperPier was Midtown South’s largest deal of the fourth quarter, and the only one to break 100,000 square feet.
Downtown finished the year strong with deals like the Teachers’ Retirement System of New York renewing and expanding to 200,000 square feet at 55 Water Street and the Associated Press’ relocation to 170,000 square feet at 200 Liberty Street.
But due to a slow start at the beginning of the year, the Downtown submarket ended 2015 with 5 million square feet of activity, the lowest yearly total in the past five years. Availability held stable throughout the year ending at 12.7 percent in the fourth quarter, and asking rents averaged $60.90.
Landlords did gangbusters in Midtown, where the leasing total of 18.2 million square feet was the highest tallied since 2012. Large blocks of space pushed the availability rate up to 11.7 percent, its highest since late 2013. Morgan Stanley topped the fourth quarter’s biggest deals with its expansion totaling nearly 261,000 square feet at the Paramount Group’s 1633 Broadway.