Office Leasing In Manhattan Drops To Lowest Level In Decades

According to new research from Colliers International, Manhattan’s office leasing volume in 2020 hit its lowest levels in two decades.

The analysis found full-year activity was down by 55.9% over the year and 13.4% quarter-over-quarter.

Around 4.16 million square feet was leased in the fourth quarter of 2020, which is two-thirds lower than the same time in 2019.

Additionally, the fourth quarter was 52.5% lower than Manhattan’s five-year average of 8.71 million square.

Asking rents have also fallen by 3.5% during this year at $74.39 per square foot, marking the biggest drop since 2009. 

The technology, advertising, media and information services, insurance and real estate industries led Manhattan’s office leasing in the fourth quarter. 

Around 3% of 2020’s leasing volume was taken up by flexible and coworking firms, a decrease from 9% in 2019 and 12% in 2018.

“With the lowest level of leasing volume so far this century along with the highest availability on record, the COVID-19 pandemic has left a measurable impact on the Manhattan office market,” said Franklin Wallach, Senior Managing Director, Colliers International New York Research. “However, there were opportunities for value-seeking tenants in 2020 as rents began to adjust in pockets of the market. With the start of the COVID-19 vaccine distribution and the end of the pandemic in sight, there is the prospect of increased activity in 2021.”