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Return-to-Office Activity Lags Leasing in Manhattan
Manhattan is seeing a stark contrast between return-to-work efforts and activity levels across representative areas of interest, constraining office leasing and investment demand, Avison Young reported. Office visitor foot traffic lingered at -70.9% while healthcare (-3.3%) and education (-11.6%) largely returned to normalcy, compared with the same post-Labor Day period in 2019.
Leasing activity improved in the summer months after a slow first half of 2021. Closed deals totaled seven million square feet in the third quarter, up from a quarterly average of five million square feet earlier this year. Annualized leasing activity in 2021 nearly matches 2020 levels.
“Tenants increasingly committed to longer-term leases, which is a leading indication of future demand,” said Mitti Liebersohn, president and managing director of Avison Young’s New York office. “Tenants that act with conviction in the current environment are capitalizing on favorable lease economics, especially higher concessions packages, when compared with pre-COVID rates.”
- ◦Lease
