Manhattan office leasing closed out last year prefer it was 2019, posting its strongest quarter since earlier than the pandemic.
Demand surged, availability tightened and rents pushed increased throughout a lot of the town, in line with Colliers information. Leasing exercise jumped greater than 25 % quarter-over-quarter to 11.9 million sq. toes, the borough’s most energetic quarter since late 2019.
“The 12 months 2025 might be remembered as a watershed second within the Manhattan workplace market’s restoration,” stated Colliers’ Franklin Wallach, one of many report’s authors.
For the complete 12 months, tenants inked practically 42 million sq. toes of offers, the best yearly whole since 2019, when the borough notched nearly 43 million sq. toes of leasing. That marks a 26 % improve from 2024.
The burst of exercise within the fourth quarter was fueled by a handful of huge offers. Bloomberg renewed nearly 496,000 square feet at International Holdings’ 120 Park Avenue, Moody’s signed a 460,000-square-foot lease at Brookfield Properties’ 200 Liberty Road and Millennium Management extended its 438,000-square-foot footprint at 399 Park Avenue. Class A buildings captured greater than 74 % of leasing quantity, persevering with the market’s flight-to-quality development.
Tenant demand translated into tightening circumstances. Manhattan’s availability price fell to 13.9 %, down 70 foundation factors from the prior quarter and marking the seventh straight quarter of secure or declining availability, the longest streak since 2007. Sublet area additionally continued to shrink, with availability falling to its lowest stage since 2019.
Rents crept increased in flip. The common asking lease climbed to $76 per sq. foot, up 1.5 % from the third quarter and the best stage since October 2020. Class A asking rents rose to $83 per sq. foot, whereas Class B rents hit a file excessive of just about $69 per sq. foot.
Midtown led the borough in leasing quantity, posting 5.3 million sq. toes of offers within the quarter, whereas Midtown South logged its strongest quarter since 2019. Downtown leasing greater than doubled from the prior quarter, helped by massive leases from Moody’s, the New York State Legal professional Common’s Workplace and Stripe.
Monetary providers, insurance coverage and actual property companies (FIRE) had been probably the most energetic tenants, accounting for 37 % of leasing exercise boroughwide, adopted carefully by TAMI (expertise, promoting, media and data) firms.
Nonetheless, Wallach cautioned that the market has solely labored via about half of its post-pandemic extra provide.
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