Manhattan leasing data shows a significant decline in the fourth quarter of 2022


Here’s some good news for Manhattan office owners:

Leasing for 2022 totaled 23.21 million square feet, up 14 percent from last year, according to CBRE. But given the 2021 pandemic freeze, how could that not be?

The bad news: Most fourth-quarter data turned sour. Availability was up slightly 19.2% from the previous quarter, and 1.54 million more square feet were leased than vacated — a “negative absorption” — CBRE said. That’s scary because the fourth quarter often shows better results as renters and landlords struggle to close deals.

The Manhattan market was “impacted in the last quarter by the hesitancy of tenants to make long-term decisions in light of the expected national economic downturn,” said Michael Slattery, CBRE’s associate director of field research.

At the very least, he noted, “year-over-year leasing activity was healthier than in 2021 when the pandemic hit.” Availability in the fourth quarter was slightly lower than the 19.6 percent recorded in February and November last year.

Other highlights from CBRE include:

  • Midtown Q4 activity was down 30% from the five-year quarterly average of 3.70 million sf. But full-year leasing of 14.81 million sf was up 15% from 2021.
  • Midtown South leasing of 1.06 million sf was 37 percent below the five-year quarterly average of 1.26 million sf.
  • City leasing of 784,000 sf in the fourth quarter was 25% below the five-year average of 1.05 million sf. On the bright side, 3.13 million sf of annual leasing is up 12% from 2021.
Downtown was the only market with positive absorption in the fourth quarter.
Bloomberg via Getty Images

Downtown was the only market with positive absorption in the fourth quarter. A net increase of 566,000 square feet brought FiDi’s year-end total square footage to 466,000 square feet.

Other brokers came out with different indicators, although they show the same, mostly negative trends. (Data varies because firms calculate different building samples).

Newmark reported total 2022 leasing volume of 32.9 million sf, up 15% from 2021. Colliers said 4Q leasing fell 46.5% year-over-year to 4.94 million sf, reflecting “the steepest quarterly decline in demand since the second quarter of 2020.”

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