Manhattan office availability hits new peak

Demand has more than doubled, but market still has long way to go

320 Park Avenue, 100 Park Avenue and 575 Broadway (Loopnet, JLL, SL Green)
320 Park Avenue, 100 Park Avenue and 575 Broadway (Loopnet, JLL, SL Green)

Office availability in Manhattan hit a new high in February, bringing office landlords to a new low.

Just under 94 million square feet of office space is available for rent in Manhattan, according to a report from Colliers. The availability rate reached 17.4 percent last month, up 74 percent since the start of the pandemic in March 2020, even as demand has more than doubled from a year ago.

Sublet availability increased by 1.27 million square feet, bringing monthly absorption — for lack of a better word — to negative 1.16 million square feet. While asking rents are up slightly from their pandemic low, the going rate of $74.88 per square foot remains almost 6 percent below pre-pandemic level.

Midtown lost the least, with leasing activity more than doubling year-over-year to 1.49 million square feet. The five largest deals were all for Midtown offices, led by Mutual of America Financial Group’s 252,000-square-foot lease at 320 Park Avenue. Just behind it was AlphaSights’ deal for 236,026 square feet at SL Green’s 100 Park Avenue.

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Still, availability in the office corridor hit 16.9 percent, bringing supply to 40.67 million square feet — a 47 percent jump from March 2020.

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Activity in Midtown South was led by Estée Lauder’s 64,000-square-foot renewal and expansion at 575 Broadway. Availability remains a record high, but asking rents hit $78.65 per square foot, making it the only market to beat its pre-pandemic average.

Activity farther downtown plummeted by 57 percent from January as Lower Manhattan’s availability reached a startling 19.9 percent. Huge spaces came up for sublet, such as a 332,000-square-foot offering at 225 Liberty Street in the Financial District. Asking rent Downtown has fallen by almost 9 percent since the arrival of the novel coronavirus.