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Manhattan office leases slump in March as coronavirus grips city

NEW YORK: Office leasing activity in Manhattan fell almost by half in March from the prior month as the coronavirus outbreak halted business activity in New York City, the U.S. epicenter of the pandemic, a report said on Wednesday.

Leasing volume slid to 1.16 million square feet last month from 2.1 million square feet in February, brokerage Colliers International Group Inc said.

The first case of coronavirus was confirmed by New York Governor Andrew Cuomo on March 1, suggesting COVID-19, the respiratory illness caused by the virus, was in the minds of New Yorkers for the entire month, said Franklin Wallach, a senior managing director at Colliers in New York.

While leases can take weeks if not months to close, it's more than likely the pandemic played a role in the drop in leasing volume, Wallach said. Adjustments to commercial real estate activity after market sell-offs also can take months.

"We've heard anecdotal cases of pending leases being put on hold that would've otherwise closed in March," Wallach said.

Cuomo on March 10 ordered a "containment area" in the New York City suburb of New Rochelle, a small lockdown that gained widespread media coverage. The governor ordered all non-essential businesses in the state to shut effective March 22.

New York City accounts for almost one-quarter of the 186,101 cases of coronavirus in the United States.

Leasing volume in Manhattan in the first quarter was 6.8 million square feet, down from a five-year average of 9.25 million square feet, Colliers said.

Leasing volume in 2019 was close to all-time highs as jobs, a major driver of office leases, soared in Manhattan.

The non-seasonally adjusted unemployment rate in New York County, which is almost entirely the island of Manhattan, fell to 3.0% in February, the latest monthly figures from New York's Labor Department showed on Tuesday.

The data did not reflect the impact of the coronavirus, the department said.

April 02, 2020

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