(Bloomberg) – The Manhattan office market is starting to pick up. Lower rents and concessions are forcing some companies to look for space after months of remote work.
The number of weekly new inquiries from companies looking for office space is up 57% this year compared to the average of July and November, according to the commercial real estate data platform VTS. Financial firms make up most of the demand, with interest centered in Midtown Manhattan.
“There are signs of activity everywhere,” said Michael Cohen, president of the tri-state region for Colliers International. “But we have such an accumulated oversupply that, despite all the activities, there will be some bargains and a lot of people are taking advantage of them.”
The new activity comes a year after the pandemic emptied most of the city’s offices and brought business to a standstill. Leasing has slowed dramatically and supply has increased as companies market offices as subleases.
The flood of available space has lowered the rent. Businesses looking for offices in large trophy towers these days are looking for discounts and concessions as landlords struggle to make room.
Even with the increase in businesses looking for offices, they want less space. According to VTS, requests from financial firms for square footage are on average 10% lower than before the pandemic, while tech firms are looking for an average of 31% less space.
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