Led by Ropes & Gray’s 429,342-square-foot commitment at 1285 Ave. of the Americas, Manhattan office leasing activity totaled 1.82 million square feet in November, 10% ahead of the five-year monthly average of 1.65 million square feet, CBRE reported. This marks the eighth consecutive month of leasing volume surpassing the five-year average. 

Year-to-date leasing activity through Nov. 30 totaled 20.75 million square feet, up 29% from the prior year. Renewals totaled 755,000 square feet in November, bringing the YTD total to 8.31 million square feet.

The availability rate was unchanged from last month at 18.9% but was down 120 basis points year-over-year, according to CBRE. Net absorption was positive 199,000 square feet in November, bringing the YTD total to positive 5.16 million square feet.

At $77.97 per square foot, the average asking rent was essentially flat month-over-month, but gained 1% Y-O-Y. The sublease availability rate declined 10 bps from last month to 4.2%, with the average asking rent remaining flat from one year ago at $57.89 per square foot.

Cap rates in the single-tenant net lease sector increased for the eighth consecutive quarter within all three major sectors in the first quarter of 2024, the Boulder Group reported. Single-tenant cap rates increased to 6.42% (up seven basis points) for retail, 7.60% (up five bps) for office and 7.02% (up two bps) for industrial.

“Cap rates in the first quarter of 2024 represented the highest levels since 2014 for single-tenant retail properties,” said Randy Blankstein, president, The Boulder Group. “However, cap rates for single-tenant retail and industrial assets remain lower than their 20-year historical average by approximately 40 basis points.”

Added Boulder Group partner Jimmy Goodman, “Elevated interest rates continue to impact transaction volume which is lower than prior years. A lack of 1031 exchange buyer activity is resulting in an increased supply of net lease properties on the market.”

Single-tenant property supply increased by more than 9% over Q4 2023 levels. With limited transactions occurring, properties continue to be added to, and stay on, the market. Despite the headwinds in the market, certain sellers including merchant builders or owners with upcoming loan maturities look to meet market pricing, according to The Boulder Group.