A dearth of large deals caused total leasing volume to slow, though retailers picked up their activity

Manhattan office leasing volume retreated in Q1 2024, measuring 6.8 million square feet (msf) for a 22.9% decline from its more robust 8.9 msf total a quarter ago and a 6.6% drop from its year-ago sum in Q1 2023. Large leases greater than 100,000 sf were fewer in Q1, with just seven such transactions signed compared to 14 last quarter. Small-tomid-sized leases are accounting for a greater share of activity. Closed deals within the 5,000-20,000-square foot range constituted 77.7% of leases signed this quarter, representing the second-highest quarterly proportion since the start of 2020. Retailers were notably active in Q1, accounting for three of the four largest transactions and 18.0% of total leasing volume this quarter, a significant step up from their 7.6% market share in 2023. Legal Services activity cooled to 10.7% of volume after a lively 2023. Subleasing activity was moderate this quarter, with subleases accounting for 1.2 msf or 17.6% of total leasing volume.

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