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Manhattan’s Office Market Perks Up as Lower Rent Drives Demand

The number of new requests per week from companies seeking office space has jumped 57 percent this year.

(Bloomberg)—Manhattan’s office market is starting to pick up, with lower rents and concessions pushing some companies to seek space after months of remote work.

The number of new requests per week from companies seeking office space has jumped 57% this year compared with the average from July and November, according to commercial-property data platform VTS. Finance firms account for the majority of the demand, with the interest concentrated in midtown Manhattan.

“There are signs everywhere of activity sprouting,” said Michael Cohen, president of the tri-state region for Colliers International. “But we have such an accumulated oversupply that in spite of all the activity, there’s going to be some bargains and a lot of folks taking advantage of that.”

The new activity comes a year after the pandemic emptied out most offices in the city and brought deals to a halt. Leasing has slowed dramatically and supply has surged as companies put offices on the market as subleases.

The flood of available space has pulled down rent. Companies looking for offices in large trophy towers these days are seeking discounts and concessions as landlords struggle to fill space.

Even with the increase in companies seeking offices, the want less space. Square footage requests by finance companies are down 10% on average from pre-pandemic levels, while tech firms are seeking 31% less space on average, VTS said.

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