Manhattan Office Leasing Hits Speed Bump In November

The Manhattan office market pumped the brakes in November.

Leasing activity dipped nearly 18 percent from October, despite a handful of big deals. Tenants inked deals for 2.99 million square feet, down about 12 percent year over year, according to a new Colliers report. Still, demand exceeded the borough’s 10-year monthly average and pushed year-to-date activity to 36.7 million square feet, already ahead of last year’s total. 

If December holds pace, Manhattan could top 40 million square feet of leasing for the first time since 2019.

A handful of headline-grabbing deals anchored the month, led by Millennium Management’s 438,000-square-foot renewal at BXP’s 399 Park Avenue. That was followed by Rippling’s 133,000-square-foot deal at Vornado’s 330 West 34th Street and two 125,000-plus-square-foot leases at Vornado’s Penn 2 by Robinhood and Dick’s Sporting Goods.

Even with the slowdown, availability dipped to 14.2 percent, its lowest level since late 2020, per Colliers. Net absorption remained positive at just over half a million square feet, while sublet supply continued its long unwind, falling for the 14th straight month to 11.8 million square feet, now below pre-pandemic levels.

Midtown led the borough with 1.4 million square feet leased, though volume slipped 9 percent from October and nearly 30 percent year over year. Availability in the submarket fell slightly to 12.8 percent from 13 percent, helped by a lack of new space coming on the market and falling sublet inventory. Average asking rents to $82.29 per square foot, about 4 percent lower than March 2020.

Midtown South recorded 1.23 million square feet of leasing, driven by tech and retail tenants. Downtown leasing tumbled to 356,000 square feet, half of October’s total, but more than double what it was last year, per Colliers. Availability ticked up to 17.6 percent as demand dropped and 205,000 square feet of sublet space hit the market at 1 New York Plaza.

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