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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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