Manhattan’s office leasing market is on pace for its strongest year since 2019, driven by robust activity in August that saw a more than 20% increase from July. This resurgence is propelled by a “flight to quality,” with tenants favoring new construction and modern, high-end office spaces. Major industries, particularly tech and legal, are leading the demand, with significant leases signed by companies like Amazon and various law firms. This renewed interest is pushing the yearly leasing volume toward a potential total of over 40 million square feet, a milestone not achieved since before the pandemic.
Despite this positive trend, the market is a tale of two sectors. The availability rate for newer, Class A buildings has tightened significantly, leading to a rise in asking rents. However, overall rents still remain below their pre-pandemic peak from March 2020. Additionally, the conversion of older, obsolete office buildings into residential or other uses is also playing a role, further impacting the supply of available space and contributing to the market’s gradual recovery.
You can learn more about this topic in a CNBC video report
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