Manhattan office rents hit 4-year low as availability remains at record-high

Growth in leasing volume accompanied by increase in sublease inventory, reversing downward trend

One New York Plaza and 60 Broad Street (Brookfield, Google Maps)
One New York Plaza and 60 Broad Street (Brookfield, Google Maps)

Manhattan’s office availability rate held steady at 17.1 percent in July, matching the record-high set two months ago, as asking rents dipped to their lowest level in years.

The high availability rate was despite the fact that Manhattan’s office leasing volume in July was up 15 percent compared to June, according to Colliers International’s monthly market snapshot.

July’s leasing volume of 2.35 million square feet was well above last year’s monthly average of 1.58 million square feet. But it was still nearly 35 percent below 2019 levels, when the pre-pandemic market averaged 3.58 million square feet per month.

Sublease availability also climbed, reversing the downward trend seen in the prior three months. Net sublet availability in July rose by 360,000 square feet to 21.61 million, the highest amount tracked by Colliers since the start of the pandemic.

July’s sublet inventory is 1.8 times more than the amount seen in March 2020, when inventory sat at 11.9 million square feet.

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The average asking rent was $72.72 per square foot, down nearly 8 percent from a year ago and the lowest level since 2017, the report said.

The top two leases for the month were both signed in the Financial District. The law firm Fried, Frank, Harris, Shriver & Jacobson inked a 400,000-square-foot renewal at One New York Plaza, an office tower owned by Brookfield Property Partners, Chinese sovereign fund China Investment Corporation, and AEW Capital Management.

Ranking second was the city government’s 313,000-square-foot renewal at Piedmont Office Realty Trust’s 60 Broad Street.

But the Downtown submarket also set a new record-high for availability at 18.3 percent, with more than 100,000 square feet added to the market at 88 Pine Street and 81,000 square feet at 110 William Street.