T
he Manhattan office market is a tale of two narratives. On one hand, the doomsayers predicted a commercial wipeout after the pandemic, with empty office towers and a bleak outlook for Manhattan's space. But on the other hand, the data tells a different story. A Newmark survey found that Manhattan's office recovery has defied the national narrative, outpacing other large US cities in terms of volume and percentage.
The numbers are striking: 12 million square feet of leasing volume in the first quarter of 2024, the most since 2019. The availability rate fell to around 17%, the lowest in five years, with prime Midtown and Park Avenue seeing rates under 15% and 10%, respectively. And while some still cling to the idea that work-from-home is here to stay, physical office attendance continues to rise, reaching 76% of pre-pandemic levels in March.
The recent relocation of Goodwin Procter from the New York Times building to BXP's 200 Fifth Ave. in Flatiron is a testament to the market's resilience. The firm's modest short-term growth – from 216,000 square feet to 250,000 square feet – belies the deal's expansion options and the building's prime location.
As the city continues to evolve, areas around Sixth Avenue, Brookfield Place, Moynihan Train Hall, and the Fulton Transit Center are drawing more stores and restaurants than ever before. The once-sleepy Midtown South is now home to IBM and Franklin Templeton's New York headquarters, with SL Green's One Madison leading the charge.
The media's predictions of a ghost town Manhattan have been consistently wrong. In 2020, The New York Times claimed that corporations were hesitant about committing to the city long-term, but since then, companies like Citadel, Blackstone, Bloomberg, Alphabet, and Amazon have shown insatiable appetites for more space in the city.
As we look back on the past five years, it's clear that the Manhattan office market has been a story of resilience and adaptation. The recent "Doom Loop Cycle" essay by a Columbia University scholar predicted a real estate apocalypse due to work-from-home, but the data tells a different tale. And now, with President Trump's tariffs looming on the horizon, we can expect another round of panic – but let's not jump to conclusions just yet.
The Manhattan office market is a complex and ever-changing beast, and it's time to stop listening to the naysayers and start paying attention to the data. The city's economy is recovering, and the office market is following suit.
