Despite leasing slowdown, mid-size occupiers are relocating, while large occupiers renew

Avison Young releases Third Quarter 2023 Manhattan Office Market Report

New York, NY – Avison Young today released its Third Quarter 2023 Office Market Report for New York, showing a 30 basis points decrease from Q2 in the office availability rate in Manhattan which is largely attributed to decline in sublease available space. Leasing activity currently stands at 17.8 million square feet (msf), down 33.6% from a year ago. Despite this decrease, occupiers of different sizes are adopting varying approaches to the market.

“In Manhattan, we have witnessed a significant decline in leasing activity from last year and are only anticipating reaching just under 24 msf by years’ end. While leasing activity is slow, we are seeing interesting approaches by large-, mid-, and small-size occupiers employ different strategies when it comes to renewals and expansions,” said Dorothy Alpert, Principal and Tri-State President.

The report states that 67.7% of large occupiers have renewed their leases, while the remainder have relocated. Small to mid-size occupiers show different patterns, with 67.6% choosing to relocate, 25% renewing leases, and 7.4% pursuing expansion. “Large occupiers are driving the renewals activity in the market, while nimble small to mid-size occupiers are relocating, taking advantage of the tenant friendly conditions,” said Danny Mangru, New York Regional Manager of Market Intelligence.