NYC Market Update: Office Vacancy Stalls

As of July, Manhattan’s office vacancy reached 10.9 percent, a 270-basis-point increase since the same period last year. Outperforming the national average of 15.5 percent, the borough maintained its leading position among gateway markets with the lowest vacancy, according to CommercialEdge data.

On a month-to-month basis, Manhattan’s vacancy rate remained virtually still. During 2021, the borough’s vacancy has been moderately fluctuating, with an overall increase of 40 basis points since January. The findings are in accordance with the market’s low activity level, still awaiting for the unraveling of the COVID-19 aftermath. The generalized hybrid working model, combined with uncertainty from incoming virus variants, are the latest major headwinds for the local office-using economy.

Manhattan joins other markets that maintained their vacancy rate month-on-month through July, along with Los Angeles (13.1 percent) and Boston (11.7 percent). San Francisco (15.2 percent), Washington, D.C. (15.9 percent) and Chicago (16.7 percent) were the gateway cities with the highest vacancy rates.

One of the notable leases during July was the announcement of Vidaris Inc.’s headquarters relocation from 360 Park Ave in the Flatiron District to the Plaza District. The building consulting firm committed to 19,000 square feet at The Durst Organization’s 1.8 million-square-foot 151 W. 42nd St. tower. Once a home to global mass-media company Conde Nast, the property is currently anchored by BMO Capital Markets.

In July, the Plaza District had one of the highest vacancy rates in Manhattan, bearing a 11.8 percent rate. Soho (15.5 percent) and Gramercy Park (11.5 percent) also reached high vacancy rates. Hudson Square remains one of the most popular submarkets, with a 6.2 vacancy rate, followed by Tribeca (7.4 percent) and Chelsea (8.7 percent).

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.