Manhattan office market enjoys positive absorption in Q2

Based on figures from global real estate consultancy CBRE for the second quarter of 2022 for Manhattan’s Midtown, Downtown and Midtown South office markets, which saw overall positive uptake drive availability down 30 basis points (bps) to 19 .2%.

Manhattan reported 5.94 million square feet of leasing activity overall in the second quarter, 5% more than the previous quarter, but 4% below the five-year quarterly average, according to CBRE. . Year-to-date rental of 11.62 million square feet is up 83% from the same period last year and 3% above average year-to-date over five years. Net absorption was positive 976,000 square feet in Q2 2022.

“The flight-to-quality trend has played a prominent role in leasing activity, particularly in the city center, as several tenants have committed to the newest and best office space in their category with equipment that appeals to their employees,” commented Nicole LaRusso, Senior Manager. research and analysis, northern region of the United States.

Midtown saw 4.24 million square feet of rentals in the second quarter of 2022, a 25% increase over the prior quarter and 11% above the five-year average. Importantly, the year-to-date rental of 7.62 million square feet is 90% higher than the figure for the same period last year and clearly indicates Midtown’s rebound. Net uptake was positive at 1.15 million square feet in the second quarter, while availability fell 50 basis points from the prior quarter to 18.1%, but down 30 basis points. base above the same period last year.

While Midtown South quarterly leasing of 1.1 million square feet was 22% lower than the prior quarter and 13% lower than the five-year average, year-to-date leasing activity totaling 2 .5 million square feet is up 92% from the same time last year. Like Midtown, net absorption in Midtown South was positive for the quarter at 195,000 square feet. At 18.9%, the availability rate was down 20 basis points from last quarter and 50 basis points from a year ago.

According to CBRE, leasing slowed in the downtown market during the second quarter. Reflecting this, rental activity for 606,000 square feet in the second quarter is 32% lower than the prior quarter and 44% lower than the five-year quarterly market average. However, year-to-date leasing of 1.49 million square feet is 43% higher than the same period in 2021. Due to lukewarm leasing, Downtown posted net absorption negative 365,000 square feet in the second quarter. The availability rate increased to 22.6%, up 40 basis points from the prior quarter and 250 basis points from the prior year.

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Jose C. Birney