NEW YORK, April 3, 2017 – Manhattan’s asking rent average reached a new record high, according to Colliers International. At $73.92/ SF, asking rents were up 0.9% since year-end, 2016 and 2.0% higher than 1Q16. Quarterly, pricing was higher in Midtown, Midtown South and Downtown and in eight of Manhattan’s 18 submarkets.

At 9.22 MSF, quarter-to-quarter leasing activity in Manhattan increased by more than 25.0%. Leasing was down 4.6% as compared to 1Q 2016 but 27.1% above the ten-year historical average.

Low unemployment helped to fuel tenant demand. Between February, 2016 and February, 2017, approximately 62,000 new private sector jobs were added in New York City. This represents a 1.7% yearly increase similar to New York State’s 1.6% annual employment growth rate and the 1.8% gain nationally. At 4.8%, New York City’s unemployment rate (as of February 2017) has been below 5.0% for the last four consecutive months, the longest such period in over a decade.

The TAMI (technology, advertising, media and information services) sector accounted for the largest share of Manhattan leasing during 1Q 2017 at 36% including 1.22 MSF of leasing at 1211 Avenue of the Americas by 21st Century Fox (renewal/expansion) and News Corp (renewal) leases, Spotify’s 378,000 SF new lease at 4 World Trade Center (WTC) and a 159,000 SF sublease from The New York Times at 1271 Avenue of the Americas.

The availability rate in Manhattan decreased by 0.1pp (percentage points) to 10.2%. Absorption was slightly negative at 0.13 MSF with the addition of large blocks of space. For the first time since 2008 – 2009, Manhattan absorption has been negative for three successive quarters.

New York City remains a target market for investment dollars globally. Year-to-date, there have been 14 sale transactions totaling $2.6 billion, 73% of which were to foreign buyers. Despite a rising interest rate environment, cap rates remain close to record low levels. A lack of available inventory means that those assets which are being marketed for either a partial or full ownership interest are trading at a premium.



1Q 2016

4Q 2016


Availability Rate




Average Asking Rent ($/SF/YR)




 Leasing Activity




QTR Absorption




Joseph Harbert, President, Eastern Region for Colliers believes that, “the New York market continues to show signs of strength and optimism. Employment is good. Leasing activity reflects that and we have seen a reawakening of the FIRE sector. Prices continue to be high but so are concessions. 2017 will be a strong year.”


At $82.45/ SF, Midtown asking rents held steady for the quarter, up a nominal 0.1%. Asking rents were 0.9% higher year-over-year. Columbus Circle was the only Midtown submarket with a quarterly increase in asking rents. Midtown asking rents are still 10.4% below the pre-Great Recession high of $92.04/ SF in 3Q 2008.

Leasing in Midtown was stronger than in any quarter for the past two years. At 4.82 MSF, leasing activity was more than one-third above 4Q 2016 and 7.6% higher than this same point last year. The 21st Century Fox and News Corp leases were Midtown’s largest deals so far this year and helped TAMI to a 43% share of quarterly leasing activity.

Four separate blocks over 100,000 SF were added to Midtown’s available inventory during the quarter at 159 East 53rd Street (annex of 601 Lexington Avenue-188,000 SF), 620 Eighth Avenue (157,000 SF), 520 Madison Avenue (140,000 SF) and 245 Park Avenue (117,000 SF). Despite this new supply, the availability rate decreased by 0.1pp to 10.6%. Absorption was flat at positive 0.23 MSF.



1Q 2016

4Q 2016


Availability Rate




Average Asking Rent ($/SF/YR)




Leasing Activity




QTR Absorption





Quarterly asking rents in Midtown South set a new record at $68.93/ SF, up 1.7% since December, 2016. Year-over-year, asking rents are higher by 3.1%. The average asking rent for Class A space increased 6.6% to a historic high $87.09/ SF, the largest quarterly gain since 4Q 2014. Above average-priced Class A blocks were listed at 61 Ninth Avenue (146,000 SF), 10 Hudson Yards (100,000 SF) and 55 Hudson Yards (87,000 SF), and upward re-pricing occurred at 1 Soho Square (209,000 SF).

Demand slowed by more than one-third quarter-over quarter to 1.78 MSF and was 41.4% lower year-over-year. Live Nation’s 100,000 SF sublease at 430 West 15th Street is the largest lease in Midtown South this year. TAMI tenants accounted for 33% of all Midtown South leasing during the quarter with Google’s expansion at 85 Tenth Avenue (60,000 SF) and Outcome Health’s sublease at 330 West 34th Street (56,000 SF).

As new large blocks were added during the quarter, Midtown South’s availability increased by 0.4pp to 8.8%, the highest rate in the last three years. Absorption was negative 0.88 MSF.



1Q 2016

4Q 2016


Availability Rate




Average Asking Rent ($/SF/YR)




Leasing Activity




QTR Absorption





After eleven consecutive quarterly increases, Downtown’s asking rent average passed the $60.00/ SF threshold for the first time on record for a new all-time high of $62.82/ SF. The 6.5% quarter-to-quarter jump was largely attributable to quoted asking rents above market averages for the available 1.80 MSF at 3WTC and higher re-pricing at 1 New York Plaza (171,000 SF). Year-over-year, asking rents are up by 8.7%.

Leasing volume in Lower Manhattan was higher than any single quarter in more than three years.

Leasing nearly tripled since 4Q16 to 2.62 MSF including RBC (403,000 SF at 200 Vesey Street), Spotify (378,000 SF at 4WTC) and New York State Attorney General’s Office (342,000 SF at 28 Liberty Street). Year-over-year, leasing increased by 21.6%.

The FIRE (financial services, insurance and real estate) sector accounted for 40% of all Downtown leasing activity during the first quarter with the RBC’s renewal, AON’s relocation to 1 Liberty Plaza (202,000 SF) and Tullett Prebon’s 127,000 SF relocation to 200 Vesey Street.

Despite new inventory at 55 Water Street (304,000 SF) and 1 Liberty Plaza (133,000 SF), the quarterly availability rate declined by 0.6pp to 11.7%. Large blocks of space were removed from the market following the Spotify, Attorney General’s Office and Tullett Prebon leases. Absorption for the quarter was positive 0.52 MSF.



1Q 2016

4Q 2016


Availability Rate




Average Asking Rent ($/SF/YR)




Leasing Activity




QTR Absorption





The average price of a Manhattan office building in 1Q 2017 was $891.00/ SF, nearly unchanged since 1Q 2016. Downtown, Class A product has surpassed its prior peak pricing. The average price is now $642.00/ SF, signaling strength and stability of Lower Manhattan’s investment market.

Notable transactions during 1Q 2017 included 551 Madison Avenue, 1100 Avenue of the Americas (leasehold) and a partial interest investment in One Vanderbilt. Two partial interest sales closed Downtown during 1Q 2017 at 60 Wall Street and 55 Broadway. Looking ahead, there are four pending deals totaling $2.7 billion including 245 Park Avenue, 619 West 54th Street and 95 Morton Street.

According to Richard Baxter, Vice Chairman, Capital Markets, Colliers International, “With longer hold periods and less sensitivity to IRR’s, cap rates continue to compress as investors both domestic and global have placed a significant premium on NYC real estate given the safety, security and capital appreciation it provides against other investment products.”

(Office sales over $10 million)

YTD 2017





Total sales


$22.1 bil

$24.1 bil

$17.4 bil


Average sale price


$246 mil

$239 mil

$191 mil


Average price/sf






Additional highlights from Colliers International’s 1Q 2017 Manhattan analysis:

  • The five largest first quarter leases were 21st Century Fox’s 777,000 SF renewal/expansion at 1211 Avenue of the Americas, News Corp’s 444,000 SF renewal at 1211 Avenue of the Americas, RBC’s 403,000 SF renewal at 200 Vesey Street, Spotify’s 378,000 SF relocation to 4WTC and the New York State Attorney General’s Office 342,000 SF relocation to 28 Liberty Street.
  • For the first time since 2Q 2012, Times Square topped Manhattan’s 18 other submarkets in quarterly leasing at 2.56 MSF with more than 1.00 MSF of deals at 1211 Avenue of the Americas.
  • Manhattan sublet availability has remained at or below 2.0% for six consecutive years, a record period. Sublet availability decreased by 0.1pp to 1.7% last quarter. The average asking rent for sublet space was up 3.5% quarter-to-quarter to $59.64/ SF, the highest since 4Q 2008.
  • Three of Midtown South’s eight submarkets have asking rents above an $80.00/ SF average and, for the first time on record, all five of Downtown’ submarkets have asking rents north of a $50.00/ SF average.
  • Manhattan’s 11 contiguous blocks of available space greater than 250,000 SF (part of availability rate) have an average asking rent of $89.89/ SF, a 21.6% premium to the Manhattan average.


1 Source: New York State Department of Labor.
2 Source: New York State Department of Labor. Unemployment data is non-seasonally adjusted.

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