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Manhattan Office Leasing Faced Serious Let Down in November

Manhattan Office Leasing Faced Serious Let Down in November

For landlords, the most recent office leasing report in Manhattan is not a stocking stuffer but more coal-like in texture.
Colliers reports that leasing activity decreased to 2.1 million square feet in November from approximately 2.6 million square feet in October. The largest office markets in the city are covered in its report: Lower Manhattan, Midtown, and Midtown South.

Leasing for the year as a whole has already exceeded that of 2020, the first year of the pandemic, and is expected to surpass 2020 again. However, it will end the year slower than 2022 unless there is an unexpected spike in December.

Two deals totaling over 250,000 square feet contributed significantly to the increase in leasing numbers in October, but there were no significant signings in November. The biggest leases of the month included multiple renewals: Palantir Technologies Inc. renewed for 140,000 square feet at RXR’s 620 Sixth Avenue, and Dentons re-signed for nearly 160,000 square feet at Rockefeller Group’s 1221 Sixth Avenue.

A sideways shift in demand is being outpaced by supply. In November, there was a negative absorption in the Manhattan markets, which meant that there was more office space available.

The bottom lines of building owners are not improved by some tenants opting not to renew their leases and others subleasing. Twenty-one million of Manhattan’s 97 million available square feet of office space are available for sublet.

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