When the pandemic hit, many New York companies abandoned their pricey Manhattan offices to save money as their staff worked from home. It was often one of the first cuts to be made. Even now, Manhattan offices are sitting vacant—the city’s vacancy rate is at 16% and sublease vacancy rate is 5%, according to the NYC Comptroller’s office. That outpaces the vacancy rates during the recessions of the 1990s, 2001 and 2008.
That being said, a new report from point2homes.com shows that midtown Manhattan had the most expensive office space in the country at $91 per square foot per year, according to data from Q1 market reports.
Manhattan took the top spot, followed by the SoMa and Menlo Park districts of San Francisco with premium offices in these locations leasing for $89 per square foot per year, as well as the Bay Area at $86 per square foot per year and Boston at $64 per square foot per year.
point2homes.com says it looked at lease rates for U.S. markets from Q1 2022 from CommercialEdge.
Despite that, the recent comptroller’s report (below) shows that the average asking rent has declined since 2020, with a slight increase as of June 2022, as office inventory has increased substantially.
According to the point2homes.com report, Manhattan office space was still the sixth most expensive in the world behind London, Tokyo, Beijing, Hong Kong, and Paris.
Looking at the average office size, roughly 6,000 square feet, which includes basic workstations; a meeting room or two; a kitchen; and at least one common area, the report explores how much the average business owner would have to pay in the most prestigious centers of commerce in the world.
This average space would lease for $547,333 in Manhattan, less than 56% of the cost in London’s West End.