Office leasing was lackluster across Manhattan in the fourth quarter, as the market continues to suffer from the effects the global pandemic, according to CBRE’s Manhattan Office MarketViews, released today.

For Manhattan overall, leasing activity totaled 1.73 million sq. ft. in Q4, 73% below its five-year quarterly average, and down 82% year-over-year. For the full year, leasing totaled 12.56 million sq ft, down 60% from 2019. Renewals totaled 2.24 million sq. ft. in Q4, bringing the year-end total to 7.51 million sq. ft. Renewals accounted for 37% of leasing velocity in 2020, compared with 20% in 2019. The availability rate rose 180 basis points (bps) quarter-over-quarter to 15.4% and was up 420 bps year-over-year. Net absorption was negative 7.35 million sq. ft. in Q4, bringing the year-end total to negative 17.66 million sq. ft. At $77.25 per sq. ft., the average asking rent fell 2% quarter-over-quarter and was down 4% year-over-year. Sublease availability was 4.2%, with an average asking rent of $61.12 per sq. ft., down 4% from one year ago. By comparison, sublease availability totaled 2.7% at year-end 2019.

The Midtown market experienced 1.43 million sq. ft. of leasing activity during Q4, a 78% decline year-over-year. As a result, net absorption for the quarter was negative 4.57 million sq. ft., bringing the total for the year to a negative 10.07 million sq. ft. Average asking rents also suffered and ended the year at $82.10 per sq. ft., 3% lower than Q3 2020 and 5% down from 2019.

Similar to Midtown, Manhattan’s Midtown South market also saw leasing activity drop. Annual leasing velocity, which includes leasing and renewals, fell to 2.33 million sq. ft. in 2020, a 71% decrease from the 2019 total. Renewals, which totaled 842,000 sq. ft. in 2020, accounted for 36% of overall leasing velocity. Q4 leasing activity totaled just 200,000 sq. ft. and amounted to 1.49 million sq. ft. for all of 2020. Midtown South also posted negative absorption of 1.81 million sq. ft. during Q4, bringing the year’s annual total to a negative 4.82 million sq. ft. As a result, the average asking rent dropped 4% from the previous quarter to $79.91 per sq. ft.

Downtown Manhattan experienced leasing activity of 101,000 sq. ft. during Q4 2020, bringing the total leasing for the year to 2.25 million sq. ft. Renewal activity was more prevalent, which comprised 647,000 sq. ft. during the quarter. As a result of lackluster leasing, the availability rate rose to 15.1%, while quarterly absorption was negative 974,000 sq. ft. For the year, Downtown had a negative net absorption of 2.77 million sq. ft. Average asking rents followed suit and dropped 1% from last quarter and 3% from the same time last year to end 2020 at $61.28 per sq. ft.

For more detailed information, please refer to the accompanying Q4 MarketViews for Midtown, Midtown South and Downtown.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.