Tide of Manhattan Office Sublease Space is Turning
Manhattan office sublease space ballooned during the COVID-19 pandemic, as tenants shed space they thought they wouldn’t need. However, CBRE’s Nicole LaRusso and Michael Slattery report that that some of those spaces—which account for 26% of all available space in Manhattan—are being pulled back, in a possible repeat of the patterns the market saw following the Global Financial Crisis.
In 2009-2010, following the GFC, 13.6 million square feet, or 57% of the gross sublease space added during the recession, was eventually withdrawn from the market. Year to date, two million square feet of Manhattan sublease space has been withdrawn, slightly more than 10% of the 19.3 million square feet listed during the pandemic. Additionally, the rate of new listings has slowed.
“As companies bring more workers back to the office—most for the majority of the work week—sublease offerings are being trimmed or withdrawn altogether,” says CBRE.