Snapshots

Q2 leasing volume reaches post-pandemic high

July 17, 2024

Contributors:

Q2 lease volume reached the highest quarterly total since the onset of the pandemic, with 50.2 million s.f. of transaction activity, up 15% quarter-over-quarter (QoQ) and up 7% year-over-year (YoY).

Leasing over the past 12 months has now returned to 77% of pre-pandemic volume, but Q2 totals reflect nearly 90% of pre-pandemic norms.

The acceleration comes after four consecutive quarters of improvement in Tenant in the Market (TIM) volume, and despite the large uptick in executed deals, demand remained stable QoQ. More than 98% of the space that transacted has been replenished by new tenant requirements in the pipeline, with only a marginal 1.1% decline in overall TIMs.

A major factor in the recovery in leasing activity has been a growing volume of larger transactions above 100,000 s.f. Q1 2023 saw the lowest volume of larger leases since the onset of the pandemic, but larger tenants have exhibited more confidence in recent quarters. The number of large leases per quarter has grown consistently since the beginning of 2023 and in Q2 reached the highest level since mid-2022, nearly double the activity in early 2023.

The largest lease of the quarter and second-largest of 2024 was Bloomberg’s renewal of roughly 900,000 s.f. at 731 Lexington Avenue in Midtown Manhattan.

Net effective office rents have increased since the pandemic in most major CBDs

Sun Belt markets are exceeding 98% of pre-pandemic office leasing volume over the past six months

In-office policies drive stronger stock market performance