- Several trophy Manhattan office towers, including 7 Times Square, 10 Bryant Park, and 6 Grand Central, are on the market as sellers capitalize on renewed investor demand.
- Manhattan office leasing reached 3.25 million square feet in August, keeping 2026 on pace for its best year since 2000 despite a monthly and annual slowdown.
- Rising CMBS special servicing rates and high-profile defaults show distress persists even as trophy assets trade at a premium, signaling a bifurcated recovery.
Manhattan’s office market is having it both ways: leasing volume is on pace for its best year since 2000, and owners are moving to cash in with a wave of tower listings, according to Commercial Observer. Colliers’ August report put leasing at 3.25 million square feet, per GlobeSt, still enough to keep the year in contention for the strongest since 2000 even after a late-summer slowdown. At the same time, trophy towers including 7 Times Square, 10 Bryant Park and 6 Grand Central have all hit the market within the past two months, with combined asking prices near $2 billion.
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A Seller’s Window Opens
Brokers say the timing isn’t a coincidence. Office investment sales grew 30% in 2025 to top $11 billion, per a JLL analysis, as institutional buyers moved from testing the waters to actively re-engaging with well-leased assets in proven submarkets. Gary Phillips, a managing director at Eastdil Secured Savills who worked on BXP’s 7 Times Square listing, said leasing fundamentals have outrun the capital markets by an unusually wide margin. “It’s usually the other way around,” Phillips said. “People have conviction and are betting on the come. Here, you don’t have to.”
The Details
The listings arrived in a rush. BXP’s ground lease at 7 Times Square is asking north of $700 million, ESRT’s 1359 Broadway sought roughly $225 million before Thor Equities agreed to pay $218 million, and Property & Building Corporation relisted 10 Bryant Park for more than $800 million after an $855 million deal collapsed in 2022. Tishman Speyer’s 6 Grand Central is seeking about $450 million, and China Life Insurance Group is marketing its minority stake in RXR’s 1285 Sixth Avenue at a valuation near $1.4 billion. Separately, the estate of L.H. Charney sold 1441 Broadway for $238 million to a partnership of 60 Guilders and Sentry Realty.
Zooming Out
Manhattan office sales totaled $2.3 billion in the second quarter, up 42% year-over-year and in line with the five-year quarterly average, according to Cushman & Wakefield. That momentum tracks the leasing market: Colliers’ August report put leasing at 3.25 million square feet, down 16% from July and 12.3% from a year earlier, but still enough to keep 2026 on pace for the best year since 2000. Midtown South leasing fell nearly 30% year-over-year to 1.53 million square feet, while Midtown signings rose 15.8% to 1.54 million square feet, led by Havas Health Network’s 254,118-square-foot lease at 200 Madison Avenue. CRE Daily has tracked a similar pattern in pre-Covid availability levels, as available supply fell to 65.40 million square feet, the lowest since September 2020.
Why It Matters
The recovery isn’t uniform. The overall CMBS special servicing rate exceeded 11% as of July, per Trepp, marking the second-highest distress rate since the Global Financial Crisis. SL Green Realty and RXR’s 825 Eighth Avenue, a 2 million-square-foot tower, remains in default with occupancy down sharply, and Cooper Union’s Chrysler Building is stuck in distress amid talks with would-be buyer Tishman Speyer. “That distress is still concentrated at the weaker end of the market,” Eastdil’s Phillips said, while trophy towers trade on strength. Green Street analyst Dylan Burzinski said improving conviction in New York, paired with more accommodative debt markets, is what’s translating into higher transaction volume.
CRE Daily has previously covered how CBD transactions accelerate when leasing fundamentals firm up first, a pattern now playing out again as capital markets catch up to Manhattan’s leasing strength.
What’s Next
Only nine single-property office towers have traded for $700 million or more since 2020, and just two since 2022, according to Green Street’s Sale Comps Database, underscoring how rare deals at this size remain. Phillips expects that to change, saying “there’s going to be some large deal announcements in the second half of the year,” pointing to both new listings and towers finally closing north of $700 million. With CBRE’s Doug Middleton noting that international capital has yet to fully return, how many of the current listings actually trade near ask will be the next signal to watch.
