Manhattan Office Sublease Space Surges Amid Uncertain Economic Environment

Available sublease space had been incrementally increasing in the years leading up to COVID and saw massive increases in both 2019 and 2020. During this time, occupiers went into cash preservation mode - as real estate is the second largest item on their balance sheet. Organizations were inclined to shed space and adapt hybrid policies to meet the needs of internal and external stakeholders. Fast forward to Q1 2023, available sublease space has reached a new peak of 24.9 million square feet. Most recently, this has been catalyzed by recent layoffs and forced reductions of footprints, largely from the tech sector. We expect sublease space to continue to grow in the near term due to the uncertain economic environment.