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Despite Delta variant fears, leasing reached its highest quarterly total since the onset of the pandemic
New York’s office market exhibited signs of vitality during the third quarter as demand surged and availability held steady. Leasing activity measured 7.7 million square feet (msf) for the quarter, up 55.8% from the second quarter, even as many companies delayed their return-to-office plans on the heels of Delta variant concerns. While leasing activity has remained below historical levels since early 2020, demand during the quarter was just below the 8.1 msf third-quarter-average during the five years preceding the pandemic. Renewed interest in office space was not limited to leasing activity—physical office occupancy for the New York Metro measured 28.1% in September, according to Kastle Systems, the highest level since the beginning of the pandemic and up from 13.9% in March. While demand improved significantly, it has not begun to chip away at market’s bloated availability, which will likely remain well-above historical averages for the foreseeable future.