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Flexible Space Gives Boost to Manhattan’s Absorption

WeWork’s newfound status as Manhattan’s largest office tenant didn’t occur in isolation. CBRE’s Nicole LaRusso reported that in just the first eight months of 2018, the flexible space (FS) sector, including coworking firms such as WeWork, has nearly tripled its share of Manhattan’s leasing volume compared to 2017.

Year to date, FS tenants have leased 1.9 million square feet of space, for 9.7% of the YTD total of Manhattan office leasing. That compares to 3.3% of the 12-month 2017 tally.

All of this leasing activity has had a salutary effect on absorption rates, according to CBRE. Due in part to new product deliveries, Manhattan’s YTD absorption has been negative two million square feet. Without the FS sector, it would be negative 3.7 million square feet. For Midtown South in particular, FS tenants have made the difference between 718,000 square feet of positive absorption YTD and 1.4 million square feet of negative absorption.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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