Office vacancies in Manhattan jumped to a 21st century record as the Covid-19 pandemic froze new rental deals and sublease openings soared.<\/p>\n
Last year ended with a 15.1% vacancy rate, up from 11.1% in 2019 and the highest in data going back to 1999, according to a report by Savills, a commercial-property services firm. That left 68.4 million square feet (6.4 million square meters) empty, including 18.6 million square feet of sublease space listed by current tenants looking to downsize.<\/p>\n
New leases in the fourth quarter dropped 64% from a year earlier to 4.6 million square feet. Extension agreements and short-term rentals dominated as tenants delayed major decisions while weighing the impact of remote working and pandemic-induced economic uncertainty, Savills said.<\/p>\n
Average asking rents for the highest-quality offices fell 8.6% to $90.42 a square foot, a decline that doesn\u2019t capture concessions such as free months or tenant-improvement allowances, according to Sarah Dreyer, head of Americas research at Savills.<\/p>\n