Manhattan

Sublease
Space
Overview
Q4 2020

Danny Mangru
Research Director, New York and Tri-State Region
Manhattan Sublease Space - Executive Summary
• Pre-COVID-19:
• Available sublease space was already surging, gaining 4.2 MSF between Q4 2018 and Q1 2020.
• In Q1 2020, 12 blocks of sublease space exceeding 50,000 SF were added to the market, accounting for 1.1
MSF of newly available space, and sublet space accounted for 26.2% of total available space.
• During the Dot Com-9/11 Crisis, available sublease space reached as high as 44.2% of total available space.

• During COVID-19:
• As of Q4 2020, sublet supply totals 18.6 MSF, a 21st century high, and accounts for 27.2% of total available
space, nearing its recent peak of 30.3% of available space in 2009.
• Over the past year, available sublease space has increased by 47.0%, while available direct space has
increased by 32.1%.
• Since the beginning of Q2 2019, 43 blocks of sublease space exceeding 50,000 SF have been added to the
market, accounting for 4.0 MSF of newly available space.
• TAMI industry tenants account for 41.8% of newly added and expected sublet blocks; Financial Services &
Insurance (17.6%) and Retailers & Luxury Brands (13.2%) follow.

• Looking Ahead:
• With many organizations planning to operate remotely until widespread coronavirus vaccination in mid- to
late-2021 and many others considering permanent shifts in office utilization, new sublease spaces will continue
to become available as tenants look to right-size their office footprints.
• Sublease supply is on pace to reach 20 MSF by the end of 2021.
savills.us 2 Availability excludes space more than 12 months from tenant possession.
Pre-COVID-19: Large Sublease Additions (Q1 2020)
> 50,000 sf
Quarter Address Square Feet Sublessor Submarket Industry
World Trade
Q1 2020 225 Liberty Street 221,400 Time, Inc. TAMI
Center/Brookfield Place
Financial Services and
Q1 2020 410 Tenth Avenue 151,400 First Republic Bank Hudson Yards
Insurance
World Trade
Q1 2020 1 Liberty Plaza 140,100 Cleary Gottlieb Legal Services
Center/Brookfield Place
Q1 2020 787 Eleventh Avenue 83,000 Nissan Columbus Circle Retailers and Luxury Brands
Financial Services and
Q1 2020 28 Liberty Street 70,000 JP Morgan Chase Financial District
Insurance
Q1 2020 160-170 Varick Street 65,400 MDC Partners Hudson Square TAMI
Personal Services and
Q1 2020 125 West 25th Street 64,500 Peloton Flatiron
Recreation
Business, Professional, and
Q1 2020 40 Wall Street 61,000 Thornton Tomasetti Financial District
Consulting Services
World Trade Financial Services and
Q1 2020 225 Liberty Street 56,200 Oppenheimer Funds
Center/Brookfield Place Insurance
Q1 2020 233 Spring Street 53,300 Juul Labs Hudson Square Manufacturing

Q1 2020 315 Park Avenue South 51,200 Bustle Digital Group Park Avenue South TAMI
Penn Plaza/Times Square Associations and Non-profit
Q1 2020 307 West 38th Street 50,500 GMHC
South Organizations

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Pre-COVID-19: Sublease Additions Industry Breakdown
Q1 2020 Sublease Additions By Sublessor Industry

TAMI
15.4%

Financial Services &

31.6%
6.0% Insurance
Retailers & Luxury 31.6%
Brands Less than one third of pre-COVID-19 sublease additions
Legal Services were by tenants within the TAMI sector.
13.1%

Personal Services

7.8% Other
26.0%

Source: Savills Research, CoStar

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During COVID-19: Large Sublease Additions (Q2-Q4 2020)
> 50,000 sf
Quarter Address Square Feet Sublessor Submarket Industry

Q4 2020* 341 Ninth Avenue 324,000 Dentsu Chelsea TAMI

Q4 2020 620 Avenue of the Americas 212,000 WeWork Flatiron Coworking

Business & Professional
Q4 2020 55 Water Street 205,700 S&P Global Financial District
Services
Penn Plaza/Times Square
Q4 2020 1440 Broadway 197,200 Macy’s Retailers & Luxury Brands
South
Financial Services and
Q3 2020 399 Park Avenue 190,900 Starr Companies Plaza South
Insurance
Q2 2020 55 Water Street 163,000 Emblem Health Financial District Healthcare

Q3 2020 113-133 West 18th Street 156,000 WeWork Flatiron Coworking

Q3 2020 1 Hudson Square 146,600 Omnicom Group Hudson Square TAMI

Q3 2020 1325 Avenue of the Americas 132,100 McGraw- Hill Education Columbus Circle TAMI
Personal Services and
Q3 2020 675 Avenue of the Americas 128,687 Weight Watchers Flatiron
Recreation
Q4 2020 237 Park Avenue 127,000 WPP Grand Central TAMI

*Currently available, but more than 12 months from possession and therefore not included in availability figures.

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During COVID-19: Large Sublease Additions (Q2-Q4 2020)
> 50,000 sf, Continued
Quarter Address Square Feet Sublessor Submarket Industry
Penn Plaza/Times Square
Q4 2020 333 West 34th Street 113,000 MTA Transportation
South
Financial Services &
Q4 2020 7 World Trade Center 107,000 MSCI WTC/Brookfield Place
Insurance
Financial Services and
Q2 2020 33 Whitehall Street 104,500 Fitch Ratings, Inc. Financial District
Insurance
Penn Plaza/Times Square
Q3 2020 1250 Broadway 102,500 Zillow TAMI
South
Q3 2020 636 Eleventh Avenue 91,900 WPP plc Times Square TAMI
Financial Services &
Q4 2020 1 Liberty Plaza 88,050 Virtu Financial WTC/Brookfield Place
Insurance
Q4 2020 622 Third Avenue 86,000 McCann Worldgroup (IPG) Grand Central TAMI
World Trade
Q2 2020 195 Broadway 83,700 Moda Operandi Retailers & Luxury Brands
Center/Brookfield Place
Q4 2020 79 Fifth Avenue 83,106 The New School Union Square Education
Financial Services &
Q4 2020 114-116 Fifth Avenue 77,344 Mastercard Flatiron
Insurance
Financial Services &
Q3 2020 One World Trade Center 75,312 Moody's WTC/Brookfield Place
Insurance

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During COVID-19: Large Sublease Additions (Q2-Q4 2020)
> 50,000 sf, Continued
Quarter Address Square Feet Sublessor Submarket Industry

Q3 2020 55 Water Street 68,731 Hugo Boss Financial District Retailers & Luxury Brands

Q3 2020 1 New York Plaza 68,323 WellCare Financial District Healthcare

Wunderman Thompson
Q3 2020 237 Park Avenue 66,402 Grand Central TAMI
(WPP)
Donnelley Financial Financial Services &
Q3 2020 55 Water Street 64,933 Financial District
Solutions Insurance
Q4 2020 620 Avenue of the Americas 62,262 Cole Haan Flatiron Retailers & Luxury Brands
Heidrick & Struggles Business & Professional
Q4 2020 1114 Avenue of the Americas 60,194 Grand Central
International Services
Q4 2020 225 Broadway 59,755 Refinery29 (Vice Media) City Hall TAMI

Q4 2020 199 Water Street 58,532 W20 Group Financial District TAMI

Q3 2020 620 Eighth Avenue 57,882 Troutman Pepper Times Square Legal Services

Q3 2020 200 Fifth Avenue 57,691 Yelp Flatiron TAMI

Q3 2020 3 Park Avenue 55,977 Houghton Mifflin Harcourt Park Avenue South TAMI

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During COVID-19: Large Sublease Additions (Q2-Q4 2020)
> 50,000 sf, Continued
Quarter Address Square Feet Sublessor Submarket Industry

Q4 2020 250 Vesey Street 54,917 The College Board WTC/Brookfield Place Education
Medical Liability Mutual Financial Services &
Q4 2020 2 Park Avenue 54,616 Park Avenue South
Insurance Insurance
Financial Services &
Q3 2020 1633 Broadway 53,278 Allianz Columbus Circle
Insurance
Q3 2020 130 Fifth Avenue 53,200 Zillow Flatiron TAMI

Q2 2020 1700 Broadway 52,500 ViacomCBS Columbus Circle TAMI

Penn Plaza/Times Square
Q2 2020 350 Fifth Avenue 51,700 Global Brands Group Retailers & Luxury Brands
South
Q3 2020 390 Madison Avenue 51,434 Hogan Lovells Grand Central Legal Services

Q3 2020 One World Trade Center 50,668 DAZN Group WTC/Brookfield Place TAMI

Q4 2020 95 Morton Street 50,264 Integral Ad Science Greenwich Village TAMI

Epoch Investment Partners Financial Services &
Q3 2020 399 Park Avenue 50,194 Plaza South
(TD Bank) Insurance

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During COVID-19: Sublease Additions Industry Breakdown
New and Expected Sublease Additions By Sublessor Industry

TAMI
15.5%
Financial Services &
4.4% Insurance
41.8%
41.8% Retailers & Luxury
of sublease additions during COVID-19 have been by
7.5% Brands
tenants within the TAMI sector, up from less than one
Business & Professional third before the pandemic.
Services

13.2% Legal Services

Other
17.6%

Source: Savills Research, CoStar

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 Previous Cycles Provide Context for Future Availability Growth
Manhattan: A surge of new direct available space has compounded the increase in availability
Dot-Com Crisis Global Financial COVID-19
80
9/11 Crisis 50.0%
• Sublet supply totals 18.6 MSF, a

Square feet in millions (msf)

44.2%
decades-long high and
45.0%
accounts for 27.2% of total 70
available space. 40.0%
60
• Over the past year, available 30.3% 35.0%
sublease space has increased by 50
30.0%
47.0%, while available direct
space has increased by 32.1%. 40 25.0%

• Despite the swell of newly 27.2% 20.0%

30
available sublease space, a larger + 15.6
+ 12.7 +11.6 15.0%
wave of recently added direct MSF MSF
20 MSF
available space has led to the 10.0%
significant rise in overall
10
availability. +15.6 +9.1 5.0%
+10.6
MSF MSF MSF
Shaded area represents trough 0 0.0%
to peak phase for sublet
available space during economic
cycles Sublet Available Space Direct Available Space Sublet Percent of Total Available Space
Availability excludes space more than 12 months from tenant possession. Source: Savills Research, CoStar

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 Manhattan Sublease Available Space
Sublet available space reaches 21st century high
Dot-Com Crisis Global Financial COVID-19
9/11 Crisis
• Large amount of sublet available 20
+15.6 17.5 +10.6 +9.1

Square feet in millions (msf)

space even before COVID-19 MSF MSF MSF
18 MSF
18.6
16.3
• Sublet available space has MSF
16 MSF
increased by 9.1 MSF since Q4 2018
to reach a decades-long high of 14
18.6 MSF.
12
• Over a seven-quarter period
between 2007 and 2009, sublet 10
available space jumped by 10.6
MSF. 8
9.5
MSF
6
• Sublet available space increased by
15.6 MSF during a 10-quarter 4 5.7
period between 2000 and 2002. MSF
2
1.9
Shaded area represents trough to MSF
Sublet Available Space
peak phase for sublet available 0
space during economic cycles

Availability excludes space more than 12 months from tenant possession.

Source: Savills Research, CoStar
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 Midtown Sublease Available Space
Sublet available space remains elevated and is expected to rise due to long-term effects of COVID-19
Dot-Com Crisis Global Financial COVID-19
9/11 Crisis
• Sublet available space has increased 14
+9.0 +8.1 +4.2

Square feet in millions (msf)

by 4.2 MSF since Q4 2018, reaching
MSF MSF MSF
the Dot Com Crisis peak. 12
11.4
9.8
• Over a seven-quarter period MSF
MSF
between 2007 and 2009, sublet 10
9.8
available space jumped by 8.1 MSF. MSF
8
• Sublet available space increased by
9.0 MSF during a 13-quarter period
between 2000 and 2003. 6
5.6
Shaded area represents trough to 4
MSF
peak phase for sublet available
3.3
space during economic cycles
MSF
2
0.8
MSF Sublet Available Space
0

Availability excludes space more than 12 months from tenant possession. Source: Savills Research, CoStar

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 Midtown South Sublease Available Space
Sublet available space has been pushed to record highs due to the impacts of COVID-19
Dot-Com Crisis Global Financial COVID-19
9/11 Crisis
• Sublet available space has increased 5
+4.1 +1.6 +3.0

Square feet in millions (msf)

by 3.0 MSF since Q4 2018 to reach MSF MSF MSF
a 21st century high of 4.5 MSF. 4.3
MSF 4.5
4 MSF
• Over a four-quarter period between
2008 and 2009, sublet available
space jumped by 1.6 MSF.
3
• Sublet available space increased by 2.3
4.1 MSF during a 10-quarter period MSF
between 2000 and 2002.
2

Shaded area represents trough to

peak phase for sublet available 1.5
MSF
space during economic cycles 1

0.2 0.7
MSF Sublet Available Space
MSF
0

Availability excludes space more than 12 months from tenant possession. Source: Savills Research, CoStar

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 Downtown Sublease Available Space
COVID-19 has further contributed to the significant supply of available sublet space
Dot-Com Crisis Global Financial COVID-19
9/11 Crisis
• Sublet available space has increased 7
+4.8 +1.8 +2.0

Square feet in millions (msf)

by 2.0 MSF since Q1 2019.
MSF MSF MSF
6
• Over a seven-quarter period 5.7
between 2007 and 2009, sublet MSF
available space jumped by 1.8 MSF. 5
4.3
MSF
• Sublet available space increased by 4
4.8 MSF during a seven-quarter
period between 2000 and 2002.
3
2.7
Shaded area represents trough to MSF
peak phase for sublet available 2
space during economic cycles 2.3
MSF
1
0.9 0.9
MSF MSF Sublet Available Space
0

Availability excludes space more than 12 months from tenant possession. Source: Savills Research, CoStar

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