An array of sizable renewals, plus 2023's largest US office lease, drove activity to a five-quarter peak

Manhattan office leasing volume accelerated to 8.9 million square feet (msf) in Q4 2023, the highest mark in five quarters and a 60.4% jump from last year's muted Q4. Leasing totaled 29.4 msf for the full year, 4.7% shy of the 2022 total. A diverse tenant mix drove overall activity, though financial services and legal services continue to stand out among sectors, accounting for a combined 53.8% of leasing in Q4 and 47.9% for the full year. Despite the stronger leasing quarter, most activity remains expiration driven. Renewals and expansions accounted for 58.3% of activity in Q4, higher than their 55.6% share for full-year 2023. Nine of the top ten transactions this quarter were by firms who opted to remain in place, with Paul Weiss' 765,931-square foot lease at 1345 Avenue of the Americas the only relocation among the top ten. Large leases are increasing in frequency, however, which may be a sign of tenants' growing confidence in committing to their office footprints. There were 14 leases greater than 100,000 square feet (sf) signed in Q4, compared to a combined 20 in the three prior quarters.

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