In Q1 2023, the office market in Manhattan hit a record high availability of 18.9%, with leasing activity measuring only 4.6 million square feet, the lowest quarterly tally in two years, according to a report from Transwestern Real Estate Services.  

Both direct and sublet availability reached record levels, with sublet availability rising to 5% of Manhattan’s total office inventory. The absorption rate was negative 1.2 million square feet, but an improvement from the prior quarter’s 2.4 million square feet. Asking rents rose 4.3% year-over-year to $71.62 per square foot.  

The market saw five deals signed exceeding 100,000 square feet. There is approximately 2.8 million square feet of new core office inventory under construction, well below the five-year quarterly average of 12.5 million square feet. Office sales volume was $441.7m, reflecting lowered investor confidence.