Manhattan office leasing remained muted in the third quarter of 2023, despite Davis Polk’s 710,000-square-foot renewal and expansion at 450 Lexington Ave., said Savills in its Q3 2023 report.
Office tenants signed for 6.3 million square feet in the quarter, down 31.1% over the same time in 2022, which was an especially active quarter. Legal services and financial services firms were the most active market participants, accounting for 52.7% of total activity.
“Activity is typically more subdued in the summer months, which was the case this year, and 2023 leasing is now on track to fall short of last year’s total by year-end,” the report said.
Overall availability fell 10 basis points (bps) from the second quarter to 19.6% but remains 160 bps higher than a year ago.
One positive, the report said, is that most relocations (70%) also entailed expansions.
