Cushman & Wakefield Releases First Quarter Office Leasing Statistics for Manhattan

Market Recorded First Year-Over-Year Quarterly Increase in New Leasing Activity Since 2022

New York, NY – April 25, 2024– Cushman & Wakefield, a leading global real estate services firm, today released its first quarter 2024 Manhattan office leasing statistics.

“While overall office leasing in Manhattan is still recovering, the market recorded its first year-over-year quarterly increase in new leasing activity in two years,” said Lori Albert, Director of Research. “As companies continue to adjust to hybrid work trends, we have seen a decrease in the overall average size of tenant footprints; however, Class A assets recorded larger average footprints for new leases, serving as further proof that the flight-to-quality trend is still very prevalent in Manhattan.”

The Manhattan office market recorded 5.0 million square feet (msf) of new leasing activity in the first quarter of 2024, surpassing the level of one year ago by 2.8% and marking the first year-over-year (YOY) quarterly increase since the first quarter of 2022.

Leasing activity was boosted by 13 new leases each greater than 50,000 square feet (sf), including three leases above 100,000 sf in the Midtown submarket. Despite the uptick in YOY activity, total deal volume remained below the prior 10-year quarterly average of nearly 6.6 msf from 2014 to 2023 and the pre-pandemic average of 7.8 msf from 2016 to Q1 2020.

Class A assets continued to outperform other classes, accounting for 73.0% of new deals inked. While the average new lease size in the first quarter totaled 9,273 sf, Class A assets recorded higher average footprints at 12,460 sf. Although the two largest leases of the quarter consisted of renewals, total deal volume reached a modest 785,684 sf, down from 1.2 msf one year ago. New and renewal leasing combined registered 5.8 msf over the quarter, a 3.8% dip from 6.0 msf recorded in the first quarter of 2023.

The supply of vacant space rose to a historic high of 98.4 msf during the first quarter, fueled by the addition of 13 blocks each greater than 100,000 sf to the market. The overall vacancy rate registered 23.4%, a 60-basis point increase from the prior quarter and up from 22.2% one year ago. Sublease vacant space recorded a marginal 2.0% uptick, reaching 22.5 msf, but was down from 22.7 msf one year ago.

Manhattan overall asking rents fell by a marginal $0.15 per square foot (psf) throughout the quarter to $73.18 psf, while Class A rents declined by $0.50 psf to $80.48 psf. Midtown overall asking rents remained flat during the quarter at $78.23 psf, as Class A rents decreased by $0.16 psf to $85.28 psf, driven by the addition of sublease space at 1775 Broadway and 1675 Broadway. Midtown South overall asking rents dipped by $0.36 psf to $77.81 psf, while Class A rents fell by $1.35 psf to $91.43 psf, due to lower-priced sublease additions. Downtown rents edged up by a minimal $0.05 psf to $55.79 psf, while Class A rents fell by $0.55 psf to $59.15 psf.