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New YorkNew York City’s office market rebounded in the third quarter from a year ago, although leasing remained below levels seen before the rise of remote working during the COVID-19 pandemic, and higher interest rates and a stronger dollar helped it. Reduced new investment in the area.
Office leasing volume grew 27.6% to 9.23 million square feet, the strongest quarterly profit since the end of 2019 — a gangbuster year for leasing in New York, according to Colliers International Group Inc.
Leasing volumes total 24.17 million square feet so far this year, or nearly 50% higher than the same period in 2021 and less than 4% from last year’s total. Volume remained below the quarterly average of approximately 9.1 million square feet in the five years through 2019.
“We’re still hearing about big pending deals,” said Frank Wallach, executive managing director of research at Colliers, New York, adding that leases in the works typically close by the end of the year.
“Not all, but a good number of them come close as we approach New Year’s Eve, after Thanksgiving because there is usually a desire to wrap everything up and take care of it,” Wallach said.
In another positive sign, the availability rate for office space declined 0.8 percent to 16.4% in the third quarter, the sharpest quarterly decrease in eight years, Colliers said.
The drop reduced availability to its lowest since March 2021, but is still well above its 10.2% level in the first quarter of 2020, Wallach said.
The leasing boom was driven by several large leases near the Hudson River in the Hudson Yards district, including the largest so far this year, a 456,000-square-foot deal by KPMG in August.
2 . Lease on Accounting Firm manhattan West, a 58-story, 2-million-square-foot tower due to open next year, is a sign of quality flight during the pandemic.
But the deal also marks a more than 40% drop in KPMG’s New York office footprint as it consolidates multiple office sites into one, an efficiency driver, and embraces the hybrid office, a model that allows companies to May allow you to reduce your space needs.
View the Space Inc., a multidisciplinary . Latest data on potential future leases for New York office space from commercial The real estate platform last week reported a 22.8% drop in August for new leasing demand in New York.
VTS expects leasing activity to be “very good” for the coming months, but if further new demand is not seen by the end of the year, leasing can be expected to decrease in 2023, VTS said.
“The next quarter or two will really tell as we get to see people who have been in the market, do they transact or not?” VTS Chief Executive Officer Nick Romito said.
Office building sales fell 71% in the third quarter to $1.2 billion, an amount often attributed to single property sales during red-hot 2015 and 2016. Colliers said rising interest rates were the most important factor in slowing sales.
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