New York Office Market Report

Leasing behavior suggests rising vacancy to continue. Following three consecutive quarters of positive net absorption in 2022, New York’s office market observed a rocky start this year as vacancy began to trend upward again. Exemplifying current conditions, new leasing velocity is slowing . In 2023, new tenants comprised roughly a third of signings across the five boroughs, down from the same period last year when this cohort represented more than half of leases. Combined with a record amount of space available for sublease as of May, this foreshadows further vacancy increases to come. An active construction pipeline exceeding 12 million square feet will constitute additional vacancy pressure until 2025. Emerging government assistance programs, however, will support the revitalization of vintage assets, mitigating the impact of these additions in the long-run.