Manhattan Leasing Exceeds 30M SF For First Time Since 2019

The Manhattan leasing market may be turning a corner, thanks partly to a large new lease from WeWork on behalf of Amazon.

The co-working firm inked a new 304,000-square-foot lease at Vornado’s 330 West 34th Street, a new Colliers report revealed. The deal helped push office leasing volume past 30.4 million square feet in November, reaching the 30 million square foot mark for the first time since 2019.

“That is one of the critical milestones that the market has been waiting on for quite some time,” said Colliers’ Franklin Wallach, the author of the report. Before the pandemic, a typical year of leasing activity was in the low 30 millions.

A WeWork spokesperson confirmed the lease, saying that the co-working firm was working with the e-commerce giant “to support its real estate strategy.”

The space will feature “world-class amenities designed to optimize productivity, encourage collaboration, and offer a seamless, flexible work experience,” the representative said.

Vornado did not immediately respond to request for comment.

A few other large leases helped push the month’s leasing activity more than 25 percent above the ten-year monthly average – including Ropes & Gray’s 430,000-square-foot lease at Scott Rechler’s firm’s 1285 Sixth Avenue and Apple’s 61,000-square-foot expansion at Vornado Realty Trust’s Penn 11.

If demand continues at the current pace, Manhattan and Midtown South will have the strongest year of leasing volume since 2019. Midtown is on track for its best year since 2018.

Availability rate tightened to 16.7 percent, the lowest since September 2022. Manhattan’s sublet supply was at 18.3 million square feet, the lowest since January 2022, while Midtown South’s sublet availability was the tightest since September 2020.

Office-to-residential conversions continue to play a role in availability, especially downtown. Last month, Newmark filed permits on behalf of 2 Wall Street owner Fieldston Capital to turn the building’s eighth through top floor into 121 apartments, removing almost 100,000 square feet of office space from the market.

“The downtown market’s availability has been tightening significantly over the last year, yet downtown’s demand has not really come back,” Wallach said. “The conversions are really playing a role there.”