The Manhattan office market escaped the summer doldrums last month as more people showed up to work and tenants continued to ink deals.
Although monthly leasing volume fell by nearly a third from July to August — typically a slow month for office deals — it was up 3.5 percent year-over-year, according to a new Colliers report.
Manhattan’s year-to-date activity reached almost 21 million square feet in August. If leasing continues at its current pace, Manhattan is on track to surpass 30 million square feet in volume for the first time since 2019.
“If demand continues at this pace for the rest of the year, we’re going to cross that 30 million square foot mark, which would really be a significant milestone in terms of Manhattan’s movement towards recovery,” said Franklin Wallach, the report’s author and executive manager of research and business development at Colliers.
Meanwhile, the number of visitors to Midtown office buildings is inching closer to 2019 levels, according to REBNY’s latest monthly analysis of Placer.ai cell phone data in 350 Manhattan office buildings for July. The last three weeks of July had an average visitation rate of 78 percent, up one percentage point from June, which set a post-pandemic record.
July’s overall visitation rate in July was up six percentage points year-over-year, and was 71 percent of 2019 levels.
“Newly constructed or renovated properties, as well as some Class B buildings with prime access to transit, continued to outperform,” said Keith DeCoster, REBNY’s vice president of research.
Although Midtown leasing activity dropped from 3 million to 1.4 million square feet month-over-month in August, that was due partly to Blackstone’s massive 1 million-square-foot lease expansion and extension at 345 Park Avenue in July.
Christie’s inked the largest lease in August, a 373,000-square-foot renewal at Tishman Speyer’s 20 Rockefeller Plaza. Midtown had four of the five largest least deals last month and is on pace to have its strongest year since 2018.
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In Midtown South, leasing volume jumped 45 percent month-over-month and 28 percent from last year, boosted by Yeshiva University’s 160,000-square-foot condominium leasehold at JEMB’s 1293 Broadway.
The availability rate dropped slightly last month from last month to about 17.4 percent. Average asking rents dropped slightly year-over-year from $75.70 per square foot to $74.56, according to the report.