CBRE: Asking Rents in Manhattan Remain Steady As Leasing Velocity Falls in Second Quarter

08 Jul 2020


CBRE released its three Manhattan Office MarketViews today for the second quarter of 2020. The reports show that Manhattan finished out Q2 2020 with 2.15 million sq. ft. of leasing activity, a 65% decrease from first-quarter 2020 and 69% below the five-year quarterly average. Despite the steep decline in leasing as a result of lockdown and stay at home orders, average asking rent was $81.30 per sq. ft., essentially flat quarter-over-quarter but up 1% from the same period last year.


“Occupiers unsurprisingly adopted a wait-and-see approach to their real estate needs in Q2, with the COVID-19 caseloads spiking for most of the quarter and considerable uncertainty about the long-term impact on the economy,” said Nicole LaRusso, Director of Research and Analysis, CBRE Tri-State region.  “While asking rents have not yet budged as a result of the drop in market demand, we do expect them to fall by 10 to16% by the first quarter of 2021 before beginning to recover.”


Midtown Manhattan finished Q2 2020 with 1.29 million sq. ft. of total leasing, 69% below the five-year quarterly average and a 68% decrease from the first quarter. Space additions were minimal through the first two months of the quarter, though in June, blocks of space over 50,000 sq. ft. accounted for more than 1 million sq. ft. of added space, raising Midtown’s availability rate 40 basis points (bps) to 12.2%. The market’s average asking rent remained essentially flat quarter-over-quarter, down only 1% year-over-year and remaining within 3% of its all-time high.


In Midtown South, leasing activity totaled 344,000 sq. ft. in the second quarter of 2020, a 59% decrease from the first quarter and 74% below its five-year quarterly average. Renewals totaled 25,000 sq. ft., pushing the year-to-date total to 263,000 sq. ft. The availability rate decreased 10 bps from the previous quarter to 10.6%, however remained up 60 bps from the year prior. Average asking rents were virtually unchanged from the previous quarter in Q2 2020 at $83.34 per sq. ft., but up 4% year-over-year.


Q2 2020 leasing activity in the Downtown market totaled 516,000 sq. ft., down 56% from the first quarter and 60% below the five-year quarterly average. Tenants migrating into the market accounted for 21% of leasing activity during Q2 at 111,000 sq. ft., down from 34% the first quarter. The availability rate increased 50 bps quarter-over-quarter to 12.9% but decreased 10 bps from the year prior. Average asking rents remained relatively flat quarter-over-quarter and year-over-year at $62.98 per sq. ft.


The three Q2 2020 Manhattan Office MarketViews are attached: Midtown, Midtown South and Downtown.

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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 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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