- New direct leases averaged $99 per SF over the trailing 12 months through September, up 28% year over year, while average base rents rose 23% to $120 per SF.
- Lease economics are extending beyond Trophy: Class A and Class B/C space deliver comparable $83 per SF net effective rents despite a $10 base-rent gap, reflecting different concessions.
- Availability fell 290 bps to 13.4%, the lowest since 2020, with Hudson Yards at just 3.7%, Midtown Core at 10.0% and Trophy at 10.1%.
Manhattan office rents for new direct leases averaged $99 per SF over the trailing 12 months through September, up 28% year over year, according to a third-quarter report from Avison Young, via GlobeSt.
Average base rents rose 23% to $120 per SF, and rents reached as high as $375 per SF in the quarter.
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Leasing Near Multiyear Highs
Leasing totaled 30.2M SF year to date through September. Avison Young described that as about flat, though it is 10.4% above the same period in 2024 and the second-best pace through the third quarter since 2014.
Proskauer Rose posted the top lease of the quarter, taking 448,000 SF at 11 Times Square. Havas followed with 254,000 SF at 200 Madison Ave., and Morgan Lewis took 210,000 SF.
Beyond Trophy
“The improvement in lease economics is increasingly extending beyond Trophy,” Avison Young said.
Class A and Class B/C space carry a $10 per SF gap in base rents but generate comparable $83 per SF net effective rents, “reflecting materially different concessions.”
Zooming Out
Avison Young’s office busyness tracker stands at 86.2% of pre-pandemic levels, well above the national average of 70.8%. Manhattan has outperformed the nation in return to office since 2022.
Consulting, research, accounting and recruiting firms are operating at 261.7% of pre-pandemic levels, the only sector in Manhattan above 100%.
The tightening at the top is also visible in Trophy vacancy, which CRE Daily has tracked.
Availability at a Post-2020 Low
Overall availability dropped 290 basis points to 13.4% in the third quarter, the lowest since 2020. Trophy availability fell to 10.1%, Midtown Core to 10.0% and Hudson Yards to just 3.7%.
Why It Matters
For investors, the flight to quality is not going away anytime soon in Manhattan. The strongest-performing assets are still Trophy buildings, but lower-tier properties are also drawing tenants as availability declines and leaves them fewer options.
The shrinking supply also shows up in the broader market, where Midtown availability has returned to its pre-pandemic level.
What’s Next
With availability at its lowest since 2020, watch whether Class B/C concessions shrink and base-rent gaps narrow as tenants fan out beyond Trophy space.
