Downtown Office Market Drives Leasing Volume In February

The Downtown office market got some good news for a change last month.

Tenants inked deals for 1.25 million square feet in Downtown Manhattan in February, the highest monthly leasing volume since December 2019, according to a new Colliers report. The blockbuster month was mostly due to Jane Street Capital’s 400,000-square-foot expansion at Brookfield’s 250 Vesey Street. The deal brings the trading firm’s footprint to nearly 1 million square feet at the Battery Park City tower.

“Downtown leasing has sort of been the exception to the uptick we’ve seen in demand over the last several quarters,” said Colliers’ Franklin Wallach, one of the report’s authors. “This deal certainly drove, not just Downtown leasing, but Manhattan leasing.”

Overall, Manhattan leasing volume was down about 13 percent month-over-month after an unusually strong January, clocking in at 3.2 million square feet. But leasing velocity grew by 38 percent year-over-year and demand was 19 percent above the ten-year monthly average.

Other large leases included iCapital’s 79,000 square foot expansion at Empire State Realty Trust’s One Grand Central Place in Midtown to bring its total footprint to 220,000 square feet. Japanese firm Mizuho Financial Group inked a 151,000 square foot sublease at RXR’s 1285 Sixth Avenue in Midtown, according to the report.

Meanwhile, Manhattan’s availability rate tightened to its lowest level since March 2021 and sublet availability also decreased to its lowest level since September 2020.

“January leasing was massive, and that was helped by a string of sizeable deals across pockets of the market” Wallach said. “But even though there was a drop off month-over-month, February in itself was still a very healthy month of demand.”