Scorecard: Despite plenty of available product, office leasing is trending downward
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Manhattan office leasing has been on a gradual downward trend over the past 12 months, an analysis of CoStar Group figures showed.
Through late December, tenants in 2016 leased 30.76 million square feet, a 17 percent decline from 2015.
One strong point in the market last year was Hudson Yards, where a few of the top leases were signed; they include Coach which took 694,000 square feet, and the law firm Milbank, Tweed, Hadley & McCloy, which took 250,000 square feet. “Hudson Yards, which [had been] a pretty challenging reach, has borne fruit,” said Arthur Mirante, a broker at Avison Young [TRDataCustom].
Eric Thomas, a broker at the tenant-representative firm Cresa, was also eyeing tenants for a space there He’s representing Robert A.M. Stern Architects, which recently inked a deal to move to Midtown later this year. The company has three years left on a Hudson Yards lease, and Thomas is targeting firms that may want to send a small group to the neighborhood while they build out a much large space in one of the new skyscrapers.
“They may want to send 30 to 50 people,” as part of a management change, Thomas said.
Overall, the Manhattan office market remained balanced in 2016, with few regions lagging far behind others, according to Mirante. Yet some classes of office space have struggled more than others. “It is a flight to quality. It is commodity space that is suffering,” Thomas said.