No Summer Slump for Manhattan Office Market

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While the city hit the beach, Manhattan’s office market kept hustling.

Tenants inked deals for 3.7 million square feet in August, up more than 20 percent from July and a 41 percent jump year-over year, according to a new Colliers report. Deloitte’s massive 807,000-square-foot deal at Related’s 70 Hudson Yards accounted for the month’s largest lease, according to Colliers.

The accounting and consulting firm announced in April that it had agreed to lease nearly three-quarters of a planned New York City office skyscraper, the largest ground-up office development in the country since the start of the pandemic.

Amazon’s 259,000-square-foot expansion at CIM Group’s 1440 Broadway was the second-largest lease. Amazon’s space at the building is operated by WeWork. Investment bank Piper Sandler’s 136,000-square-foot lease at Paramount Group’s 1301 Sixth Avenue was the month’s third-largest deal.

If this pace keeps up, Manhattan will smash through 40 million square feet of leasing for the year — a threshold it hasn’t crossed since 2019.

The availability rate also fell to 15 percent, the lowest since January 2021, as tenants grabbed space and landlords yanked big blocks off the market for conversions. Sublet space shrank for the eleventh straight month, hitting its tightest level since July 2020, Colliers reported.

Midtown South was the star of the show, racking up more than half the city’s total

demand, or about 2.2 million square feet, thanks to Deloitte and a string of deals like The Farmer’s Dog’s 59,000-square foot lease, owned by a joint venture between Aurora Capital Associates, A&H Acquisitions and Allied Partners. Leasing volume in the submarket rose by almost 65 percent from July and more than doubled year-over-year, according to Colliers.

Downtown lagged behind, with just 191,000 square feet of leasing — its slowest month since December. The submarket accounted for only about 5 percent of the monthly demand, Colliers said.