- Manhattan office leasing rose over 20% in August to 3.7M SF—well above the 10-year monthly average of 2.72M SF.
- If this pace continues, Manhattan could exceed 40M SF in leasing this year, the highest since 2019.
- The average asking rent hit $74.73 PSF in August, a 1% monthly increase, but still 6% below pre-pandemic levels.
A Post-Pandemic High
Manhattan’s office market is regaining strength, reports CNBC. In August, leasing volume surged past 3.7M SF, marking a more than 20% increase from July, according to Colliers. The strong monthly showing puts 2025 on track to surpass 40M SF of annual leasing. That level hasn’t been reached since 2019.
Leasing Momentum Returns
The recovery follows a slow multi-year period marked by pandemic disruptions. Leasing volumes dipped well below historical norms in recent years. In 2024, they returned to the 25-year average of 32–33M SF. Now, the momentum appears to be accelerating.
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Who’s Driving Demand
A mix of tech and legal tenants are leading the charge. Amazon alone has inked more than 1M SF in leases, subleases, and coworking deals since late 2024. The legal sector, which set a record in 2023, also remains active, with leasing still above pre-pandemic levels.
Flight To Quality Continues
Tenants continue favoring new Class A construction like Hudson Yards and One Vanderbilt. As a result, availability in newer buildings has fallen to just 6.7%, compared to 17% in prewar office product. Overall availability fell to 15%—the lowest level since January 2021 and the 18th straight month of market tightening.
Rent Trends And Supply Shifts
While rents remain below pre-COVID levels, August saw a notable 1% uptick. Some of that stems from higher-priced new listings and landlords pushing prices upward. Additionally, office-to-residential conversions are playing a role: Nearly 9M SF have been removed from the market since 2021. These conversions are often of lower-rent space, raising the average asking rate across the board.
Looking ahead
The combination of robust demand, flight to quality, and shrinking supply is setting up Manhattan’s office market for its strongest year since 2019. If the trend continues, landlords may gain more pricing power, while tenants will face tightening competition for top-tier space.
