New York office market reports

Q4 2023

At year-end 2023, Manhattan concluded with 27.5 million square feet (msf) of leasing activity – marking a 21.1% decrease from 2022 and the lowest year of total leasing volume since 2020. Despite the below-average leasing activity, available sublease space has reached its lowest value since Q4 2021 at 20.8 msf. Manhattan has seen available sublease space decrease quarter-over-quarter since Q1 2023, dropping by 16.4% since then. The dip in available sublease can largely be attributed to a handful of factors – notably the demand for high-end, built sublease space. From 2018 up until the pandemic hit in March 2020, Class A subleases accounted for 24.1% of subleasing activity. In the following period, April 2020 to present day, Class A subleases accounted for 32.5% of subleasing activity – a 34.8% increase.


27.5 msf

Manhattan leasing activity in 2023, the lowest total since 2020

 

Total leasing activity for 2023 in Manhattan reached 27.5 million square feet (msf), reflecting a 21.1% decrease compared to 2022 and a 9.2% drop from 2021. This marks the lowest level of leasing activity since 2020, largely fueled by a lack of large deals; 2023 witnessed the fewest leases exceeding 100,000 sf since 2008, totaling only 33 leases.

In Q4 2023, the signing of several notably large leases propelled this quarter to exceed expectations to 8.6 msf. However, among the 10 largest leases inked during this period, eight were renewals. Large occupiers are persisting in their protectionist approach, opting for renewals rather than relocation.

-16.4%

Decrease in available sublease space since Q1 2023

 

As of Q4 2023, the available sublease space in Manhattan decreased to 20.8 msf, comprising 20.9% of the total available space in Manhattan (99.4 msf). While sublease availability remains higher than historical levels, it has experienced notable declines in three consecutive quarters from its peak in Q1 2023.

Consequently, the total availability rate has decreased by 70 basis points (bps) since its peak in Q2 2023 (19.9%), now at 19.2%. Although this figure is still historically elevated, it represents the lowest total since Q4 2021.

+34.8%

Increase in Class A subleasing vs. total subleasing activity pre to post-COVID

 

From the beginning of 2018 until the onset of the pandemic in March 2020, Class A subleases represented 24.1% of sublease activity by square footage. However, from April 2020 to the present day, Class A subleases represented 32.5% of all sublease activity — reflecting a 34.8% increase.

In 2023, both Trophy and Class A subleases together constituted 74.3% of all subleasing activity, as occupiers continued to actively seek high-end and built sublease spaces.

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