By Ilana Siyance
For the last 18-months, Manhattan office real estate has felt the full throttle of the pandemic. Finally things are starting to improve. As reported by Crain’s NY, in the third quarter of 2021 companies scooped up leases for about 5.9 million square feet of commercial real estate in Manhattan. That’s a 70 percent jump over the previous quarter, and is being called the best quarter since the pandemic hit in the first quarter of 2020, as per the latest CBRE report.
While the improvement is certainly a cause for relief, the impact of the pandemic is still clear, as the total for the third quarter was still 5 percent below Manhattan’s five-year quarterly average of roughly 6.2 million square feet. “While still in the early stages, New York City is showing clear signs of a recovery,” said Nicole LaRusso, senior director of research and analysis for CBRE’s New York Tristate Region. “In fact, new leases and expansions improved for the third consecutive quarter.”
Year to date commercial leases in Manhattan beat 2020 by 13 percent, up about 12.2 million square feet. During the quarter, the lease availability rate in Manhattan stayed flat, compared to the second quarter at 18.6 percent, as per the CBRE report. Similarly, the average asking rent remained flat quarter over quarter at $75.88 per square foot, but it experienced 4 percent drop compared to the same time last year.
Commercial leasing was most active in Midtown for the third quarter, with firms leasing some 3.3 million square feet of space. The single largest Midtown lease was 513,000 square feet of space renewed at 100 W. 33rd St by Interpublic Group of Companies. The next most notable lease size was NBC Universal’s renewal of roughly 340,000 square feet of space at 1221 Sixth Ave. The largest new lease was at 1301 Sixth Ave, where Credit Agricole signed on for 167,000 square feet.
Midtown South had an impressive quarter, with a 47 percent jump over its five-year quarterly average of roughly 1.2 million square feet. The biggest new leases in the neighborhood were: 66,595 square feet of space at 32 Sixth Ave by Cedar Cares, and 64,516 square feet of space at 125 W. 25th St. by Cockroach Labs.
Downtown Manhattan is recovering at a slower pace than Midtown and Midtown South, with firms leasing 775,000 square feet of space in the third quarter. Though modest, Downtown has also experienced an increase in leasing activity for three consecutive quarters.