TOP 5 NYC OFFICE LEASING TRENDS

PREPANDEMIC JOB RECOVERY ALMOST AT PAR

Since the trough in employment in April 2020, NYC is up by 291,800 jobs, having regained 86% of pre-pandemic employment and over 90% of office using jobs.

NYC EMPLOYMENT EXPONENTIALLY STRONGER COMPARED TO FINANCIAL CRISIS

While employment losses have been significant during the pandemic, they have primarily been for non-office-using jobs. Following the Global Financial Crisis, nine out of ten jobs lost in NYC were for office-using jobs, compared to just two out of ten for the COVID-19 pandemic.

TENANT REBOARDING RAPIDLY

With the vaccine becoming widely available, companies are beginning to plan their return to the office. Several large corporations have planned a return to the office by June with many others opening at near capacity following Labor Day. Hybrid-model-office schedules are under consideration by most companies as employees to return to the workplace.

PENT UP DEMAND

The new entrants to the market are looking for more space than they currently occupy and are slated to positively absorb over 600,000 SF. Short-term deals signed by tenants during the pandemic will likely add further demand to the market between 2021-23.

SUBLEASE SPACE WITHDRAWN FROM THE MARKET

More than 450,000 SF of sublease space has been withdrawn from the market since December.

NYC OFFICE LEASINGKPG Commentary and Outlook

PREPANDEMIC JOB RECOVERY ALMOST AT PAR

Office leasing velocity has picked up significantly over last couple of months. We expect this trend to continue through 2022 and anticipate 2022 to be one of the highest leasing velocity years on record. This will be primarily due to overwhelming pent-up demand as coronavirus concerns alleviate and tenants with upcoming expirations regain confidence about committing to long-term leases.

NYC has the best workforce, best culture, best restaurants and now it is affordable again.

Greg Kraut, CEO, KPG Funds

Another bright spot is a potential surge of in-migration into Manhattan. This is a result of the plummeting of residential rents which is attracting a young demographic that had previously been priced out of New York City.

Employers follow talent, and this influx of skilled and talented workers is expected to keep firms committed to maintaining a strong New York City footprint.