According to Newmark Knight Frank’s latest quarterly research, office market activity in New York City remains muddled.
There was a negative absorption of 10,973,238 square feet after availability in the city grew, marking the highest volume of negative quarter absorption on record.
On the other hand, Manhattan’s availability rate grew from 11.9% to 14.1% during the second quarter, with 18 out of 19 submarkets seeing an increase.
Of all the submarkets, Penn Station performed particularly well, namely due to Facebook leasing the 730,000 square foot Farley Post Office on 390 Ninth Avenue.
However, asking rents dipped for the second straight quarter due to sublease spaces pushing average rents down and forcing landlords to reevaluate their prices.
Manhattan’s three major submarkets saw a drop in rent, with Midtown South seeing the biggest dip of $3.11 per square feet.
At the same time, availability in Midtown South saw a 2.7% increase from the previous quarter due to a 114,230 square feet addition on 149 Madison Avenue, which was previously leased by WeWork.
“Non-office using industries have borne the brunt of the pandemic’s effects,” the report read. “For example, the hospitality industry’s added 75,200 jobs since May, but it’s down 162,000 jobs since the onset of COVID-19.”