Manhattan leasing volume increased to 8.9 million square in the fourth quarter 2023, the highest mark in five quarters according to market sources. Leasing totaled 29.4 million square feet for the full year 2023, 4.7% lower than the 2022 total.
The availability rate across all markets and asset classes fell 10 basis points from a quarter ago to 19.5% but remains 70 basis points higher than a year ago. Overall average asking rents in Manhattan fell 2.0% from a quarter ago to $75.98 per square foot. Rents were unchanged year over year.
Thus, we see a mixed picture regarding the overall market. Activity has recently picked up and we are seeing decreases in availability. However, asking rents decreased last quarter and have been unchanged over the past year.
We at Armano Real Estate are cautiously optimistic about the Manhattan market. The office market has stabilized, and we believe we are amid a steady and slow recovery process.
Opportunities abound for tenants. Current availability rates are substantially above pre-COVID lows. For example, according to Co-Star, the availability rate for 4- and 5-star buildings (high and highest quality respectively) was 10.5% in the fourth quarter of 2019. This rate now stands at 17.3%, approximately 64% higher. Moreover, we are seeing unique opportunities in buildings that are under stress due to high vacancy and credit issues as well as buildings that have been impacted by the WeWork bankruptcy.
Tenants have a unique window of opportunity to take advantage of existing conditions. So, our advice is, Carpe Diem! Seize the market opportunity.
It is increasingly important to have a trusted and unconflicted advisor to help navigate the market and create substantial economic value. Armano Real Estate can help your company maximize concession packages and occupancy cost savings.
Feel free to contact us regarding your current real estate situation. We can provide a no-fee lease review and analysis and a preliminary space program to help meet your hybrid work plans and corporate real estate vision.
Feel free to see additional resources related to the WeWork bankruptcy below.
