Manhattan office leasing totaled 6.3 million RSF (rentable square feet) in Q3 2023, 31% lower than Q2 2022 according to market sources. 2023 leasing is expected to be lower for full-year 2023 versus 2022.
The overall availability rate fell 10 basis points from last quarter to 19.6% but remains 160 basis points higher than a year ago. Asking rents across all markets and asset classes averaged $77.54 per RSF representing a 2.2% yearly increase. Moreover, sublet supply is starting to meaningfully retreat from peak levels reached in Q1 of this year.
The gap continues to widen between Class A and B/C asking rents across New York City. Manhattan Class A asking rents grew to $86.95 per RSF in Q3, 38.8% higher than the $62.65 per RSF Class B/C average.
Despite muted leasing activity, availability appears to have peaked and asking rents are modestly rising. This is evidenced by a preliminary Q3 report from Co-Star showing a decrease in available space of more than 4.0 million square feet.
We at Armano Real Estate view third quarter reports with cautious optimism. The market appears to have bottomed out. However, office using job growth has been on a downtrend since mid-2022 as hybrid work remains here to stay. And this may persist. Thus, we envision a slow and modest recovery.
Tenants have a unique window of opportunity to take advantage of existing conditions. And 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 carbon emissions below:
NYS Carbon Emissions
https://www.nyc.gov/site/sustainablebuildings/ll97/local-law-97.page
https://www1.nyc.gov/assets/buildings/local_laws/ll97of2019.pdf
