Manhattan leasing volume in July was 2.39 million SF, nearly six times more than the volume in June when only 0.42 million SF was leased. However, July volume was less than half of the 5.17 million SF leased a year ago. Notably, 71 percent of last month’s leasing activity was driven by renewals, including several short-term extensions, Colliers noted in their research report.
- Better to wait for comps: Moody’s Analytics REIS estimates that the value of office buildings across the U.S. will fall by 17.2% in 2020. That is a loss in value not far from the estimated 19.2% drop for retail and Moody’s forecast for a 20.5% drop in lodging, WSJ reported.
- Be Smart: Long-term interest rates continue to be low, and real-estate funds are sitting on huge amounts of capital waiting to be spent. Office leases tend to lock tenants in for many years, so it may take a while for revenue to drop. Property owners are also less indebted on average than in past crisis periods, most recently 2008.
- Worth Noting: Dell Technologies is reviewing 250 leases on offices world-wide that are due to expire over the next two years. In the U.S., the technology company leases 5.3 million SF. The perceived increase in employee productivity in a remote-work environment led the company to more seriously consider reducing its space. [WSJ+TRD]