New York Market Overview

Demand for Manhattan office space slowed with monthly leasing of 1.8 million square feet of new Manhattan office leases, the lowest level of monthly leasing in 2016. Year-over-year, leasing activity is down 13.5%. But overall vacancy declined to 9% in May, a reduction of 10 basis points, or 0.1% which was due to a noticeable reduction in the amount of new space added to the market. Despite a slowdown in leasing velocity, a minimal amount of new supply hit the market, allowing for the overall vacancy to drop in the Tri-State area. Overall, Manhattan average asking rents climbed to $72.81 per square foot last month, up 3.8% from $70.13 per square foot in May 2015. Midtown rents, in particular, were strong, jumping 3.6% year-over-year to $79.04 per square foot, which was the highest level since December 2008.