Manhattan office market ends 2021 on a high note

Manhattan’s availability rate also increased during the fourth quarter, to an all-time high of 17.3%, according to the report. Since March 2020, the amount of available office space in the borough has skyrocketed by 72.2%, to approximately 92.7 million square feet.

The most active market last quarter was Midtown, which saw approximately 4.8 million square feet of rental activity. The biggest deal in the neighborhood was NBCUniversal Media which extended its 340,000 square foot lease at 1221 Sixth Ave. The average asking rent reached $79.95 per square foot and the availability rate reached 16.8%, according to the report.

Midtown South had its strongest quarter since the end of 2019, with businesses leasing around 2.9 million square feet. The largest contract was MSG Entertainment Group, which took 428,000 square feet from Penn 2, the largest contract of the quarter in Manhattan. Its average asking rent rose for the fourth consecutive quarter to $78.63, and its availability rate hit an all-time high of 16.6%, the report said.

Lower Manhattan saw about 1 million square feet of leases in the fourth quarter. Larger deals included Orchard taking 107,000 square feet at 195 Broadway and Hudson River Trading expanding to 75,000 square feet at 3 World Trade Center. The average asking rent rose to $60.15 and the availability rate also hit an all-time high of 19.6%, the report said.

Throughout 2021, businesses leased approximately 12.9 million square feet in Midtown, 8 million square feet in Midtown South, and 4.1 million square feet in Downtown. All of these numbers are up from 2020 but down from 2019.

Net uptake for the fourth quarter was approximately negative 2.3 million square feet, and net uptake for the year was negative 17.3 million square feet, meaning 17.3 million square feet of more office space came on the market than was rented. Since March 2020, absorption in Manhattan has been approximately 38.9 million negative square feet, more than the entire downtown Los Angeles office market.

Jose C. Birney