Office Leasing Rebound Drives Manhattan Sublease Decline

Office Leasing Activity in Manhattan Is Up 38% Year-Over-Year, with 26.03M SF leased through October, indicating strong tenant demand.
Sublease Availability Has Dropped Below Pre-Pandemic Levels, falling to 11.8M SF—down nearly 50% since Q1 2023, per Transwestern.
Major Tenants Like Stripe and Robinhood Signed Large Deals, pushing October leasing 48% above the five-year monthly average.
Core Sectors Are Fueling the Recovery, including tech, finance, and media, with further boosts expected from rate cuts and return-to-office trends.

Key Takeaways

Office Market Heats Up

Manhattan’s office leasing market continues to gain momentum, reports GlobeSt. CBRE reported a 38% year-over-year increase through October, totaling 26.03M SF. October alone saw 2.79M SF leased, outperforming the five-year monthly average by 48%. This marks one of the most active periods for Manhattan office space since before the pandemic began.

Big Names, Big Leases

Stripe led October’s leasing activity with a 139,497 SF deal at 28 Liberty Street, followed by Robinhood and Dick’s Sporting Goods at PENN 2, both signing for over 125K SF. Baker & Hostetler also took 115,078 SF, further boosting Midtown activity. The concentration of deals from high-profile tenants signals a growing confidence in long-term office needs.

Sublease Space Tightens Up

Transwestern reported Manhattan’s sublease inventory fell to 11.8M SF as of November 1, dipping below pre-pandemic levels for the first time. That figure is down 875,500 SF from the prior month and has plummeted by nearly 50% since Q1 2023. The sharp drop points to fewer distressed tenants and improving fundamentals across the borough.

Rents And Demand Show Mixed Signals

While leasing activity surged, CBRE noted average asking rents held steady at $77.22 PSF, showing resilience in pricing. However, October demand slipped to 983K SF, down from 1.71M the month prior.
Still, year-to-date tenant demand totals nearly 10M SF, reflecting stable interest despite monthly volatility.

Core Industries Power Recovery

Savills previously forecasted 2024 to be Manhattan’s best office leasing year since 2014, driven by sectors like tech, finance, and media. CBRE’s latest data supports that outlook, as these industries remain active in seeking quality space.

Investors are watching for further boosts from rate cuts and continued enforcement of in-office work policies.