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Manhattan Sublease Inventory Nears 21st Century High

Both direct and sublease space continued flooding the Manhattan office market in the first quarter, increasing overall availability to 17.2%, Savills reported. Sublease inventory now totals 22 million square feet, up 61.7% from pre-pandemic levels and near the 30% share of available inventory last seen in 2009. A total of 11.3 million square feet of direct and sublease space became available in Q1.

Looking ahead into 2021, Savills’ Sarah Dreyer and Danny Mangru are forecasting that asking, taking and effective rents will continue to decline in the coming quarters as landlords move from price discovery to wholesale repricing.

The pace of new sublease additions may slow in coming quarters. Closure of additional coworking locations plus delivery of new developments will increase overall availability.

Tenants are expected to opportunistically upgrade in the current leasing environment, driving a “flight to quality” that leaves a glut of largely commodity space.

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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 GlobeSt.com 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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