Concessions for Manhattan Class A properties now equate to 24% of the total rent throughout the lease term

Before COVID, tenants received an average of 16.7% of their total rent as concessions, which included free rent and tenant improvement allowances, throughout their lease term. Among these, Trophy tenants received the largest relative concession packages, at 17.2% of their total rent.

Following COVID, concession values have risen across all asset classes - now averaging 21.3%. Class A tenants now receive an astonishing 24% of their rent through concessions. This means that Class A tenants paying $100 per square foot (psf) will, on average, receive $24 psf of concessions per year, in the form of free rent and tenant improvement allowances.

Thanks to the current tenant-favorable market conditions, overall concessions as a percentage of rent have increased from 16.7% pre-COVID to 21.3% post-COVID. In particular, Trophy concessions have risen from 17.2% to 20.0%, Class A concessions have increased from 17.1% to 24.0%, and Class B/C concessions have grown from 15.4% to 21.2%.

June 15, 2023

US-NY-NYC New York