Manhattan office leasing jumps 16%, but still well short of 2019

Plaza District accounted for more than 30% of Manhattan’s leasing volume

22 Vanderbilt, 731 Lexington Avenue, 12 East 49th Street (Google Maps, Getty)

Elizabeth Cryan

Jul 1, 2024, 2:45 PM

Manhattan office leasing still has a long way to go.

Leasing volume during the first half of 2024 was up 16 percent year-over-year, according to the latest Colliers office report.

But even if leasing volume continues at the same pace for the second half of the year, it would still be about one-third below 2019.

“We are still not at a place where tenant demand consistently, for a prolonged period, outpaces supply, at least for the overall Manhattan market,” said Franklin Wallach, executive managing director of research and business development at Colliers, who wrote the report.

“We do get glimmers of it, and we do get quarters and months where demand outpaces supply,

but it is yet to be seen on a consistent basis where the entire market has turned the corner.”

This past quarter, the Plaza District led leasing, accounting for more than 30 percent of Manhattan’s leasing volume. The flex office industry leased almost half a million square feet in Manhattan during the highest quarterly volume in the industry since 2019.

Three of the top five transactions during the quarter were in Midtown — the Bloomberg 940,000 square-foot lease extension at Alexander’s 731 Lexington Avenue, Industrious’s new 240,000-square-foot lease at Kato’s 12 East 49Street and Bain & Company’s 235,000-square-foot lease at Milstein’s 22 Vanderbilt.

Certain Midtown corridors are faring better than others. On Park Avenue, for example, the availability rate was down to 10.6 percent this quarter, compared to an overall availability rate of 16 percent in Midtown. On Madison Avenue, the availability rate is the lowest it’s been in almost four years, boosted by leasing at 22 Vanderbilt.

“Midtown, just like the rest of the market, is not homogeneous,” Wallach said. “It is really building-by-building, street-by-street.”

The Financial District had an availability of 25.4 percent for the quarter, the only Manhattan submarket above 25 percent.