The Manhattan office leasing market remains subdued, resulting in a historic high of 70.4 million square feet of direct space availability, according to Savills’ Q2 market report. Financial and legal services sectors have remained active, accounting for most of the top ten largest transactions during the quarter; many being renewals or expansions. This increase in available space is putting pressure on concession packages offered to tenants and leading to a downward trend in rental rates – creating an environment favorable for tenants.
Class A asking rents saw a slight increase by 1.7% compared with the previous quarter and 0.7% year-over-year due mainly to tenant preferences for trophy or Class A+ spaces . The outlook suggests that there will be an uptick in available sublease spaces as expiring sublet listings are not renewed – especially those lacking built-in infrastructure or furnishings..
Overall, current conditions indicate that Manhattan’s office leasing market continues its subdued state while providing opportunities beneficial towards tenants seeking new leases or renewals/expansions within this sector
