Office Market Reports Q2, 2023

David Ratner

Jul 1, 2023

For Q2 2023, the office leasing market in Brooklyn and Manhattan presented the following trends

Brooklyn Office Market For Q2, 2023

Decrease in Leasing Activity: Brooklyn's quarterly leasing activity significantly dropped, totaling only 0.15 million square feet, a two-thirds reduction from Q1 2023.
Decreased Asking Rent: The average asking rent in Brooklyn decreased by 1.1% since March 2023 to $50.77 per square foot.
Expanded Availability Rate: Brooklyn's availability rate increased by 0.7 percentage points to 23.0%, the highest quarterly availability since Q1 2021.
Sublet Space Proportion: Sublet space accounted for 6.1% of Brooklyn’s overall availability, which was significantly less than Manhattan’s 22.2% share.

Manhattan Office Market For Q2, 2023

Decline in Leasing Activity: Manhattan experienced a 29.9% decrease in office leasing, totaling 5.16 million square feet during Q2 2023.
Leasing Activity Below Previous Year's Levels: The leasing activity in the first half of 2023 was 16.3% lower compared to the same period in 2022. The full-year leasing volume for 2023 was projected to fall 14.0% below 2022’s total but still ahead of 2021 demand.
Increase in Asking Rent: The average asking rent in Manhattan grew by 1.3% during Q2 2023 to $75.41 per square foot. This increase was attributed to a mix of large, above-average priced blocks of space added to the inventory, particularly in Midtown and Midtown South.
Record-High Availability Rate: Manhattan’s availability rate expanded to a record-high of 17.8%. The available supply increased by 78.9% since March 2020, reaching a record-high of 96.36 million square feet.
Reduction in Sublet Availability: Manhattan's sublet availability decreased by 0.73 million square feet during Q2 2023, marking the largest quarterly decrease since Q4 2021.

These trends reflect a dynamic and evolving office leasing market in both Brooklyn and Manhattan, with significant differences in terms of leasing activity, asking rents, and availability rates.

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