By: Serach Nissim

Vacancies in Manhattan office space continue to be a pressing concern, following the pandemic and continued shift towards remote and hybrid work options.

As reported by Crain’s NY, the month of April, known for springtime and renewal, saw only 1.5 million square feet of space leased inked—falling well below the monthly average even during the pandemic years of 2020, 2021 and 2022. The latest report from Colliers, shows that the available supply of commercial space in Manhattan has hit a record high of close to 94 million square feet for the month of April.   The availability rate hit roughly 17.4 percent, matching its record from February 2022.  The report highlights that the amount of available office space has jumped by over 74 percent, since the pandemic first plagued the city in March 2020.

The new report shows that Midtown is the busiest commercial neighborhood in the borough—with roughly 891,000 square feet of leases signed.  Midtown South is the next busiest with 420,000 square feet of leases, and Downtown came in third with 184,000 square feet of leases.  All three neighborhoods experienced significant drops in leased space year over year, though Midtown leasing increased compared to March.  Throughout Manhattan there were just two big leases of over 100,000 square feet last month, and one more lease between 50,000 and 99,999 square feet.  All three of these bigger leases were in Midtown.

Namely, HPS Investment Partners renewed and expanded their lease to160,000 square feet at the 36-story Class A building at 40 W. 57th St, which offers a total of 712,000 square feet of space. The law firm Sheppard Mullin renewed and expanded to 108,000 square feet at 30 Rockefeller Plaza, the 67-story building just steps from the famed Rink at Rockefeller Center. Lastly, ExodusPoint Capital Management renewed and expanded to 75,000 square feet at 65 E. 55th St, the 36-story tower on Park Avenue.  Even the posh neighborhood’s availability rate was 15.6%, with average asking rent prices at $78.74 per square foot.

For Midtown South, April turned out to be the slowest leasing month since March 2021. The biggest deal inked in the neighborhood was by Claims Conference organization, which renewed its 34,000-square-foot lease at 1359 Broadway. Midtown South’s availability rate broke records to hit 17.9%, per the Colliers report.  The neighborhood has some 1.1 million square feet of available space vacating at 261 11th Ave, and another 125,000 square feet becoming available at Penn 2. Oddly, the average asking rent in the vicinity rose to $81.77 per square foot, probably due to the newly redeveloped space at Penn 2 and 261 11th Ave.

As per Crain’s, Downtown Manhattan marked its slowest month for 2023.  The biggest lease for the month was by Brennan Center for Justice which renewed its 50,000 square feet of space at 120 Broadway.  In that neighborhood, the availability rate was steady at 20.5%.  Average asking rent prices fell by 10.8% since the pandemic’s start in March 2020.  The average price per square foot hit $58.69, marking the most significant decline out of the three top commercial regions in Manhattan, as per the report.