David Ratner
Apr 1, 2023
In Q1 2023, the office leasing markets in Brooklyn and Manhattan exhibited contrasting trends
Brooklyn Office Market For Q1 2023
Increase in Leasing Activity: Brooklyn's leasing activity significantly increased, more than doubling from Q4 2022 to 0.45 million square feet.
Growth in Asking Rent: The average asking rent in Brooklyn grew by 1.8% since December 2022, reaching $51.33 per square foot.
Expansion in Availability Rate: Brooklyn’s availability rate expanded by 1.2 percentage points to 22.3%, marking the highest quarterly availability since Q3 2021.
Comparatively Lower Increase in Supply: Unlike Manhattan, Brooklyn's total available supply increased by just 6.0% since March 2020.
Manhattan Office Market For Q1 2023
Substantial Growth in Leasing Activity: Manhattan office leasing grew by 49.0% to 7.36 million square feet, the sharpest quarterly increase in demand since Q3 2021.
Large Transactions Driving Demand: This significant increase in leasing activity was largely due to five separate transactions, each over 250,000 square feet, accounting for nearly one-third of the total leasing volume.
Increased Available Supply: Manhattan’s available supply increased by 72.0% since March 2020 to a total of 92.60 million square feet, just slightly below the record-high in February 2022.
Rise in Sublet Availability: The sublet availability in Manhattan totaled 22.10 million square feet, surpassing the pandemic peak of 21.16 million square feet in July 2021.
Decrease in Asking Rent: Manhattan’s average asking rent decreased by 1.3% during Q1 2023 to $74.42 per square foot.
These trends reflect a dynamic period for office leasing in both Brooklyn and Manhattan, with Brooklyn showing a notable increase in leasing activity and Manhattan witnessing a significant surge in demand, primarily driven by large transactions.
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