The Manhattan workplace market got here again from an early slowdown to achieve a stable quarter of development.
Corporations inked leases for about 11.8 million sq. toes of Manhattan workplace area within the first quarter of 2026, in accordance with a brand new report from Colliers. That’s a slight decline from the top of 2025, however nonetheless a 3.4 % development yr over yr and the strongest first quarter since 2014, in accordance with the report. Common asking lease grew 2 % quarter over quarter and 4 % yr over yr to $77.55 per sq. foot.
It’s a restoration for the market after a slower January and February, thanks largely to a very massive lease renewal close to Bryant Park. However regardless of the rally, it will likely be tough for 2026 to rival 2025’s sizzling streak, marked by 15 million sq. toes of optimistic absorption, stated Franklin Wallach, government managing director of analysis at Colliers.
“There have been lots of people that checked out this kind of superb milestone that was achieved in ‘25 and stated, ‘Wow, can the market do it once more in 26?’” he stated. “To realize one other yr of 15 million sq. toes of optimistic absorption is a tough benchmark, to say the least.”
Multiple-fifth of the quarter’s leasing quantity was pushed by its largest lease, Financial institution of America’s 2.4 million-square-foot renewal at 1 Bryant Park. With out that, leasing quantity would have are available in nearer to 9 million sq. toes, a extra important drop from the top of 2025. Leasing quantity usually declines barely from the primary quarter to the second quarter, because it did this yr, Wallach stated, as corporations push to get huge offers signed by the vacation season.
The supply charge tightened to 13.7 %, in accordance with the report, down 2.4 share factors yr over yr. The quantity marks two years of quarterly tightening or stabilizing.
Midtown demand grew considerably, pushed by the Financial institution of America lease. The world captured 57 % of the borough’s leasing exercise. Asking rents within the district, outlined as above fortieth Road and under 59th, grew to $84.74 per sq. foot.
Different main leases within the neighborhood embody the borough’s second largest: legislation agency Gibson, Dunn & Crutcher’s 361,600-square-foot renewal at 200 Park Avenue.
Leasing quantity in Midtown South, outlined by Colliers as fortieth Road to Canal Road, fell greater than 10 % quarter over quarter. The district accounted for about 34 % of the overall Manhattan leasing quantity. Nevertheless, availability tightened and asking lease grew over the quarter in addition to over the yr. Asking lease within the district has reached $80.27 per sq. foot. The largest lease within the district was the borough’s third-largest, Ramp’s 285,300 sq. foot lease at 28-40 West twenty third Road in Flatiron.
AI-related corporations particularly leased greater than 600,000 sq. toes, Wallach stated. That surpasses the entire AI leases signed in 2024 and places the yr on observe to surpass 2025 as nicely. The biggest AI-related lease was Clay’s deal for 163,000 sq. toes at 11 Madison Avenue, additionally in Flatiron.
“The tech sector has at all times naturally gravitated in the direction of Midtown South, however not completely,” Wallach stated, noting main leases in Midtown and Downtown as nicely.
Downtown’s leasing velocity fell by about half from the earlier quarter. Asking rents grew from earlier quarters however had been nonetheless considerably decrease, at $61.70, than uptown districts.
Workplace-to-residential conversions proceed to help the tightening of the general Manhattan market, Wallach stated. Prior to now 5 years, about 10 million sq. toes of workplace area has been faraway from the market. The tower at 750 Third Avenue, for instance, eliminated about 750,000 rentable sq. toes from the market.
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