New York office market reports

Q2 2024


Through the first half of 2024, Manhattan leasing activity reached 14.6 million square feet (msf) of leasing activity – an increase of 18.7% compared to this time last year – and mostly driven by large block leasing. The overall availability rate remained relatively stable from Q1 2024, dropping by 10 basis points (bps). Direct available space decreased by 700,000 sf and sublet available space only decreased by 70,000 sf.

A certain segment of the market is overperforming relative to its share of the overall market: class A properties. While only representing 15% of the Manhattan office market, class A properties have captured 42% of transaction activity by square footage year-to-date. This is class A’s second largest share of leasing activity in the last 10 years, only beat by 2020. Like overall leasing activity, this is mainly driven by large occupiers – with four of the six largest leases this quarter signed in class A properties.

 
14.6 msf

Manhattan leasing activity YTD 2024 outperformed Q1-Q2 2023

YTD 2024 leasing activity in Manhattan reached 14.6 million square feet (msf) – marking an increase of 18.7% compared to Q1-Q2 2023. Despite the year-over-year increase, YTD leasing activity still falls 30.7% below the pre-COVID (2000 – 2019) Q1-Q2 average of 21.1 msf.

Additionally, the number of 100k+ sf transactions through Q2 increased from 11 in 2023 to 14 in 2024. The increase in large-block leasing activity bodes well for surpassing 2023 by the end of 2024.

19.6%

Manhattan availability rate stabilized mid-year

Quarter-over-quarter, the overall availability rate in Manhattan has dropped by 10 basis points (bps) from 19.7% to 19.6%. Despite a slight fluctuation in direct and sublet availabilities, the overall availability rate has remained relatively stable for the past 12 quarters.

Compared to last quarter, direct available space decreased by 700k sf while sublet available space only dropped by 70k sf. These small variances pushed the overall availability rate to drop by 10 bps.

42%

of YTD transaction activity was captured by class A properties

Year-to-date, class A properties have captured 42% of transaction activity by square footage, while only representing 15% of the Manhattan office market. Trophy properties, the top 10% of the market, have accounted for 36.2% of transaction activity and class B/C properties have accounted for the remaining 21.8%.

Aside from 2020, class A’s YTD share of transaction activity at 42% marks the highest level in the last 10 years, only followed by 2019 where class A accounted for 35.3% of transaction activity. Further, four out of the six largest leases signed this quarter were in class A buildings.

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