Manhattan Office Leasing Activity Dips 14 Percent Below 5-Year Average in August

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According to CBRE, Manhattan office leasing activity totaled 1.88 million square feet in August 2015, 14% below its five-year monthly average of 2.20 million sq. ft. The availability rate was stable over the past month and down 20 basis points from August 2014. Year-to-date net absorption remains negative and is largely unchanged from last month. The average asking rent fell slightly over the past month and is up 6% from the same period last year. Sublease availability currently stands at 1.7%, its lowest level since the beginning of 2008.

Midtown

Leasing activity totaled 1.12 million sq. ft. in August, 16% below its five-year monthly average of 1.33 million sq. ft. Year-to-date leasing activity totaled 12.42 million sq. ft., up 9% compared to the same period last year. The availability rate is 10 basis points lower than the figure reported last month and one year ago. Year-to-date net absorption remains negative, but has improved by about 270,000 sq. ft. in August. The average asking rent increased by $0.33 over the past month and is up 5% from August 2014. Sublease availability currently stands at 1.9%, having fallen below 2% for the first time since 2008, with an average asking rent of $62.30, up 7% year-over-year. Four of the top five leasing transactions were for sublease space.
 
Midtown South

Leasing activity totaled 375,000 sq. ft. in August, 14% below its five-year monthly average of 435,000 sq. ft. Year-to-date leasing activity totaled 3.97 million sq. ft., down 16% compared to the same period last year. The availability rate remained stable over the past month and is down 120 basis points from August 2014. Year-to-date net absorption remains positive and is relatively unchanged from last month. The average asking rent increased by $1.00 over the past month and is up 7% from August 2014, largely due to the addition of premium-priced space at 110 Greene Street. Sublease availability currently stands at 1.6%, with an average asking rent of $58.88, up 10% year-over-year.
 
Downtown

Leasing activity totaled 391,000 sq. ft. in August, 11% below its five-year monthly average of 439,000 sq. ft. Year-to-date leasing activity totaled 2.92 million sq. ft., down 35% compared to the same period last year. The availability rate increased 30 basis points (bps) over the past month and is up 40 bps from one year ago. Year-to-date net absorption remains negative and has decreased a further 250,000 sq. ft. in August, mostly due to more than 500,000 sq. ft. of office space coming to market at 20 Broad Street. The average asking rent decreased by $1.01 over the past month, following downward re-pricing at 28 Liberty Street and the leasing of a large block of premium-priced space at 300 Vesey Street. On average, rents are still 16% higher than August 2014. Sublease availability currently stands at 1.3%, with an average asking rent of $44.24, up 15% year-over-year.