New York Market Overview
- Total Manhattan Class A Office vacancies stayed at 8.7 % vacant
- Total New York City Office vacancy decreased from 7.4 % vacant to 7.3 % vacant
Manhattan office leasing experienced a parallel slowdown in activity. The overall volume of deals declined in 2012 by about a third to roughly 27 million square feet, from more than 40 million square feet in 2011.
Of the biggest 10 Manhattan leases in 2012, a stunning nine were renewals, illustrating the conservative tack many companies are taking to keep spending down. Many companies did not want to spend capital. In addition to Viacom’s 1.6 million-square-foot renewal and expansion, Morgan Stanley renewed 1.2 million square feet at 1 New York Plaza in the Financial District. (The building was later hit by Hurricane Sandy and remained closed for several weeks. The office portion of the building has reopened, but its lower-level retail is being completely reconstructed because of the storm damage.) Other large renewals included Swiss Bank UBS signing for 920,000 square feet at 1285 Sixth Avenue and Citibank taking 475,000 square feet at 601 Lexington.
While real estate insiders believe that banks and other financial service firms were scaling back office space in 2012, those companies ended up signing some of last year’s biggest Manhattan office leases.
Indeed, four of the top 10 leases were inked by banks, three of those were renewals, and the other was a renewal and expansion. However, their leases may be part of a regional consolidation that reduces the company’s overall New York area office footprint. The only relocation lease on the top 10 list was the U.S. General Service Administration’s 270,000-square-foot lease at 1 World Trade.