MARKET TAKEAWAYS

Tech leasing softens, but tenants continue to diversify their location preferences. Overall tech leasing volume dipped for the third straight quarter to almost half the pre-pandemic peak level at the end of 2019. However, tech tenants remain loyal to Midtown South and the World Trade Center submarket, while also eyeing Midtown’s west side submarkets.

Landlords in Midtown South remain confident in demand for prime space in the market. Asking rents grew a robust 3.1% on the quarter to $83.49 psf, as several planned redevelopment projects were listed for premium rent of $100.00 psf from potential anchor tenants.

Tech giants are scaling back on their workforce amidst concerns of a recession. Microsoft and Gopuff recently announced they will make cuts to their workforce, and Alphabet's Google announced it will slow the pace of hiring during the second half of the year.

Sublet space additions in the traditional tech-centric markets of Midtown South and Downtown outpaced new sublet availabilities in Midtown. As tech companies weigh their real estate needs, some are looking to dispose of their space. A recent example, Yelp announced it will close their NYC office on July 29 and be fully remote.

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