According to new quarterly research from Transwestern Commercial Services, for the first time in history, the average rent in Manhattan’s office market topped $80 per square foot, closing the second quarter at $80.37, in a strong reporting period that also saw 8.5 million square feet of leasing activity.
The FIRE (finance, insurance and real estate) sectors were key to the quarter, accounting for 37% of all leasing activity, with the coworking segment representing 10%. Year-to-date leasing activity stands at 15.5 million square feet, a figure that is down 9% from the same point last year but above the historical mid-year average of 14.8 million square feet.
“As we cross the mid-year point for 2019, we can see the signs for another strong year, with leasing activity well above the mid-year average,” said Danny Mangru, TCS Research Manager. “Meanwhile, we keep seeing new record highs for asking rents, while availability rates drop to points not seen several years. We expect the office leasing levels to continue for the remainder of the year, since we’re seeing activity across multiple industries, not only the hot FIRE sector and coworking segment.”
Manhattan Mid 2019 Office Market Highlights Include:
- Office leasing activity totaled 8.5 million square feet, up 20% from last quarter.
- 26 new leases exceeding 50,000 square feet were signed, including 10 that topped 100,000 square feet.
- 1.3 million square feet of positive absorption marked the highest second-quarter figure since 2015.
- Average asking rents posted a new all-time high, increasing 2% to $80.37 per square foot.
- Manhattan’s availability rate fell to 10.5%, the lowest level since 2015.
- 12 blocks of space exceeding 100,000 square feet were added to the market. Of those, nine are in Midtown, two are in Downtown and one is in Midtown South.