The year 2020 had held upbeat prospects for the NYC office market, harboring expectations of achieving continued rent growth and stabilized vacancy levels. However, the unprecedented COVID-19 pandemic that manifested itself in the early part of the year put a spanner to all expectations.
With the market remaining largely inactive owing to restrictive lockdowns that deterred market activities such as property inspections, Manhattan office market remained considerably muted.
Consequently, the year 2020 clocked office space absorption of just 13 million sqft as against 34.9 million sqft in 2019, signifying a steepyear-over-year decline of 63%. This has been the lowest velocity in office space absorption in the past two and half decades. The significant decline came in the wake of the pandemic-induced uncertainties leading most occupiers to defer their decisions on fresh offtake of commercial spaces as they reevaluated their strategies, taking into account the role of work from home for a longer-term.