The Manhattan legal sector, which accounts for a small portion of the city's office asset class, is seeing fewer large-scale deals. Leasing volume in the city's legal space plummeted by 22.1 percent to 3.17 million square feet.
"The share of large [100,000+-square foot] transactions shrank in 2024, with just seven leases, compared to ten in 2023," Colliers said.
"Additionally, the legal sector represented 9.5% of overall Manhattan office leasing volume in 2024, down from 14.9% in 2023," Colliers said.
However, that may not tell the full story. For one, the leasing volume was the second highest annual total over the past 10 years, according to Colliers. Also, demand soared by 22.4 percent. Most of the demand (75.5 percent) came from the Midtown submarket.
Almost all of the occupancy in the legal sector was featured in a trophy or Class A building. Just one percent was present in a Class B property.
The largest legal lease went to Ropes & Gray thanks to its new 430,000 square foot space at 1285 Avenue of the Americas. Some other big deals included Willkie Farr & Gallagher and Winston & Strawn, which both struck lease renewals for 316,000 square feet and 238,000 square feet at their respective properties.
Rents were at a premium in the legal space, costing 9.8 percent more at $95.68 per square foot versus the rest of the industries in Manhattan. That said, landlords in the legal sector were offering high concessions. For example, the median rental abatement period was 15.7 months, which 18.1 percent above the entire Manhattan average across all industries.
Colliers did not provide an outlook but noted that legal service employment rose by 1.4 percent in 2024 to reach 85,100 workers. That marks its highest figure the category has seen since the Great Recession. So the legal space at least appears to look in a stable place despite the lack of larger deals.