Anchor Tenants Revive Manhattan Office Market

Big Names, Big Bets

Manhattan’s office market gains momentum as top firms pre-lease space in high-end towers years ahead, reports Commercial Observer. Developers from Hudson Yards to Fifth Avenue are moving forward with ambitious office projects. They’re backed by anchor tenants seeking premium space. In a competitive hiring and branding environment, top-tier offices have become a key differentiator.

In April, Deloitte inked a deal for 800K SF at 70 Hudson Yards—one of the largest leases in recent years. The building, developed by Related and Oxford Properties, isn’t expected to be completed until 2028. Similarly, Simpson Thacher took 700K SF at Extell’s 570 Fifth Avenue, and C.V. Starr signed on for 275K SF at BXP’s 343 Madison.

Why It’s Happening Now

According to industry leaders, the shift is driven by firms in finance, law, and consulting prioritizing in-office collaboration and using high-quality real estate as a recruitment tool.

“These growth sectors believe the office experience is essential,” said CBRE’s Mary Ann Tighe. “They’re looking to upgrade, and that means new buildings and large footprints.”

New office towers are rising across Manhattan. Projects include RXR and TF Cornerstone’s 175 Park Avenue, Related’s 625 Madison, Silverstein’s 2 World Trade Center, and BXP’s 3 Hudson Boulevard. Each is competing for tenants in a tight top-tier market.

A Supply Squeeze Amid Soaring Demand

While new construction is underway, Manhattan’s total office inventory is shrinking. Between Q2 and Q3 of 2025, the city lost 16.7M SF of office space—mostly due to office-to-residential conversions, according to Savills.

The crunch is most evident at the top of the market. Vacancy rates for trophy buildings are down to just 7.6%, with Midtown trophy office rents hitting an average of $132.24 PSF. At iconic buildings like One Vanderbilt and the Seagram Building, rents are exceeding $200—and in some cases nearing $285 PSF.

The Ripple Effect On The Broader Market

This top-heavy leasing trend is reshaping the entire office ecosystem. As anchor tenants take top-tier spaces, mid-market firms are pushed to older or less premium options—if they can find them. Smaller tenants, especially, are struggling to compete in a market that’s quickly pricing them out.

“There’s not enough of the right kind of space,” said RXR’s William Elder. “There’s a war for space going on in prime locations.”

With more office-to-residential conversions, competition for trophy space grows, making leasing more exclusive and costly.

Financing Hinges On Anchor Leases

Anchor leases aren’t just about occupancy—they’re essential for financing. Developers often need these deals to secure loans or justify construction starts. Leases tend to span 15 to 20 years and hinge on tenant credit, scale, and flexibility.

“The tenant is always the solution,” said CBRE’s Tighe. “You’re signing for something that doesn’t exist, so trust and track record matter more than ever.”

What’s Next?

As developments like 343 Madison, 175 Park Avenue, and 3 Hudson Boulevard push forward, expect more anchor deals to follow. But even with millions of SF on the way, demand may continue to outpace supply in Manhattan’s high-end office market.

“This is one of the strongest markets we’ve seen in years,” said JLL’s Paul Glickman. “But when the music stops, we may not have enough seats for everyone.”

Bottom Line

Manhattan’s office market is staging a comeback—one driven by bold anchor tenants, a flight to quality, and fierce competition for space. The question is no longer whether tenants are returning. They’re back. The question is: Will there be enough space to meet the demand?