(Bloomberg) -- The amount of office space available in Manhattan is at the highest level in at least 30 years.
The availability rate jumped to 17.2% in the first quarter, according to a report Thursday by Savills. Much of that was driven by a surge in sublease space, which reached 22 million square feet (2 million square meters), 62% higher than before the pandemic, the real estate services firm said.
“Abundant short- and long-term options are driving price reductions,” Savills said in the report. “Many owners are proposing historically aggressive rates, concessions and flexibility to secure tenants amid so much competition.”
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New York's office market has taken a hit from a pandemic that has kept many workers home for months. A year after the city shut down, vaccines are raising hopes for a return to the office.
The tenants actively looking for space in the market are seeking deals. Asking rents fell for the fifth straight quarter to $76.27 a square foot, down 9% from a year earlier, with growing competition from cheaper subleases.
Concessions for long-term leases at newer office buildings also rose: Average tenant improvement allowances jumped 16% and free rent surged 17% to an average of 13.5 months. The tenant-friendly market is expected to last for at least the next 12 to 18 months, Savills said.
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