Financial services and legal services signed the lion's share of leases in a subdued Q2 2023

Manhattan's office leasing market remains subdued, as leasing activity totaled 6.9 million square feet (msf) in Q2 2023. Leasing in the first half of 2023 fell 12.1% from H1 2022, and Q2 2023 activity measured 25.2% below the pre-pandemic (2015-2019) Q2 average. Activity among technology and media firms is still lackluster, but financial services and legal services tenants continue to transact and have filled part of that gap in the market. Seven of the quarter's ten largest transactions were concentrated among financial and legal firms, though six of those seven were renewals or expansions in place. Renewals and expansions accounted for 49.0% of Q2 leasing activity - roughly an even split with new leases and relocations. While the share of renewals was lower than last quarter's 63.1%, it is elevated by historical standards, reflecting the ongoing "wait and see" approach many tenants are taking.

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