Big Apple office buildings have never been so empty.
While the peak era of remote work may feel long ago in the past, the number of vacant offices in Manhattan just hit a new record.
The borough’s office availability rate -– or, how much of that market is currently unfilled — hit 18.1% in the first quarter of 2024, the highest rate ever recorded. That’s according to a recent report by investment management company Colliers, Crain’s first reported.
In contrast, that number, which includes currently empty offices and those that will be empty in the very near future, was just 10% back in March 2020. The majority of the 8% vacancy increase that has occurred since then happened between 2020 and 2022.
Still, the rate has gone up even in the past 12 months, when it was 17.1%, and even last quarter, when it was 17.9%.
With the increase in availability, rent has also gone down slightly; 0.2% over the course of February.
“We are still waiting for demand to catch up and surpass supply,” Colliers Executive Managing Director Franklin Wallach told Crain’s. “It’s still the early innings of 2024, and there are both a fair number of large leases pending and a large number of tenants in the market. But we also anticipate some large blocks of space to be added.”
Downtown is hurting the most, according to Colliers, with the Financial District the most forsaken of commercial markets.
Midtown has fared better, but the biggest divide in which offices will find tenants and which will remain derelict isn’t based on neighborhood, but age and offerings. Newer, more amenity-filled Class A buildings, as they’re called, are getting leased at a significantly faster clip.
For those banking on the death of remote work and the reclaiming of offices, there is one positive angle in Colliers’ findings, Crain’s notes: The rate at which offices are emptying out is, at least, not as fast as it was at the height of COVID-19.
