Manhattan Rents Fall as Office Leasing Slows in May

Manhattan rents dropped in May as office leasing weakened, marking the steepest monthly decline in nearly three years.

June 6, 2025

Asking rents in Manhattan fell 1.2% in May to $73.49 PSF—the steepest monthly drop since 2021.
Midtown leasing volume dropped 31.2% from April. Midtown South was the only area to post gains.
Despite weaker rents, availability fell to 15.4%, the lowest level since January 2021. Net absorption stayed positive for an 11th month.

Key Takeaways

Market Under Pressure

Manhattan office rents fell sharply in May, per GlobeSt. Colliers reported the average asking rent dropped to $73.49 PSF, down from $74.37 in April. That 1.2% decline marks the biggest monthly dip in almost three years.

Midtown was hit hardest. Rents there dropped 1.7% to $79.12 PSF. According to Colliers, that’s the steepest monthly decline for Midtown in seven years. The drop was driven by a high-priced listing withdrawn at 522 Fifth Avenue and a lower-priced space added at 805 Third Avenue.

Midtown Slips, Midtown South Gains

Leasing volume in Midtown fell 31.2% from April and 38.4% from a year earlier. Midtown South saw the opposite trend. Activity rose 26.2% month-over-month and surged 95.4% year-over-year. Downtown performance remained flat and was not highlighted in the report.

Availability Drops, Absorption Stays Positive

Despite softer rents, the market showed some strength. Availability fell to 15.4%—a 30 basis point drop from April and a 250-point drop from May 2024. That’s the lowest level since January 2021.

Net absorption totaled 1.8M SF, keeping the streak of positive absorption alive for an 11th straight month. This signals steady, if cautious, demand.

Largest Leases of the Month

New York University signed the biggest lease in May, taking over 1M SF. Other major deals included Fox Rothschild’s 72,750 SF extension and Aquarian Holdings’ 72,353 SF lease, both in Midtown.

Why It Matters

The drop in rents highlights the continued pressure on Manhattan’s office market. But falling availability and positive absorption show that tenants are still active. Companies appear to be taking advantage of better terms, even as the broader market adjusts.

What’s Next

With more blocks of space priced lower or removed from the market, expect continued price shifts. As conditions evolve, tenants may gain even more leverage—while landlords work to hold the line on value.