Q2 2023 New York Office Market Report

The New York office market ended the second quarter with vacancy rising to 18.0 percent, up from 17.6 percent as over 1.36 million square feet of direct space hit the market, offset by 250,000 square of sublease space taken by occupiers. There were two deliveries during the quarter, bringing 2.0 million square feet to the market, leaving only 4 buildings totaling 648,000 square feet under construction. New York office workers are returning to the office, with a weekly average of 49.1 percent, according to Kastle Systems. Tuesday is the busiest day of the week, with occupancy rates at 59.5 percent.

Vacant and available sublease space in Manhattan dropped in the second quarter, bucking recent trends. There is 23.1 million square feet of available sublease space, accounting for 5.5 percent of inventory. Quarterly sublease transaction volume is below the ten-year average with 1.12 million square feet of activity. However, the average size of transactions increased 25 percent to just over 10,000 square feet, indicating users in the market are taking advantage. With sublease space continuing to rise, landlords have been under pressure to compete with below market rates by providing more concessions and more flexible lease terms.

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