Armano Real Estate April 2023 Newsletter
Manhattan leasing activity increased in Q1 2023 by 32.5% versus the prior quarter according to market sources. However, activity remained 9.0% below the five-year average.
Available sublet space climbed to a new record high increasing 10.5% from one year ago, 1.6% higher from the previous all-time high. Sublet space now accounts for 24.6% of all available office space in Manhattan.
Manhattan’s overall availability rate increased by 70 basis points from the prior quarter and 40 basis points from one year ago. The overall average office rent across all markets and building classes of $77.09 per square foot was essentially flat from one quarter ago.
According to weekly occupancy reports from Kastle, building access measured 46.8% the week ending 3/29/2023. This was slightly lower than 47.0% the week ending 3/22/2023. Building access measured 46.6% the week ending 9/14/2022. Thus, building access has generally remained unchanged since the return to work after Labor Day 2022.
In summary, the market remains weak by all measures. We had expected a slight uptick in building access in early 2023 and it has failed to materialize. Thus, landlords continue to offer huge incentives to lure and retain tenants.
Armano Real Estate is helping tenants to leverage market conditions to maximize economic value and to help meet their hybrid workspace plan and vision. We most recently have been achieving annual occupancy cost savings in the 35% to 65% range through negotiating rent reductions and implementing space optimization plans. We also have been achieving huge landlord concessions in the form of tenant improvements, free rent and forgiveness of remaining lease obligations.
We are providing a link for case studies for two recent transactions, The King’s College, located in the Downtown Market and Northeast Power Coordinating Council located in the Midtown Market.
Success and Case Studies PDF
Please see the below resources and feel free to contact us regarding your current real estate situation. We can explore strategies to mitigate rising rents. And we can provide a no-fee lease review and analysis and a preliminary space program to help meet your back to work plans and corporate real estate vision.
NYS Carbon Emissions
https://www.nyc.gov/site/sustainablebuildings/ll97/local-law-97.page
https://www1.nyc.gov/assets/buildings/local_laws/ll97of2019.pdf
Sustainability – Buildings (nyc.gov)
https://www.thecity.nyc/environment/2022/10/7/23393489/nyc-climate-change-law-details-2024-deadline
Returning to the Office
