- Manhattan office leasing volume in 2025 reached 41.92M SF, a 25% increase over 2024 and just 2.4% below 2019’s level.
- Class A office space accounted for 74.2% of leasing volume in Q4, showing a strong flight-to-quality trend.
- Average asking rent climbed 3.5% annually to $76 PSF, the highest since October 2020.
- The availability rate declined to 13.9% in Q4, marking the seventh straight quarter of stability or tightening supply.
Momentum Returns to Manhattan Office
The Manhattan office leasing market closed 2025 on a strong note, registering its best year since 2019, reports CoStar. Total leased space for the year hit 41.92M SF, according to Colliers, as demand surged for high-quality offices. This represents a 25% increase from 2024 and nearly matches pre-pandemic volumes.
Midtown led the charge, with 19.32M SF leased—surpassing pre-pandemic highs and hitting a peak since 2018. Major deals, such as Moody’s new 460,000 SF lease at Brookfield’s 200 Liberty St., contributed to the bullish finish.
Class A Demand Leads Recovery
The shift toward Class A space remains pronounced. In Q4 2025, Class A offices made up 74.2% of leasing activity—well above their 64.4% share of inventory. This aligns with a broader flight-to-quality trend seen across the market as tenants seek premium amenities and locations.
Colliers noted a rise in $150-plus and $200-plus PSF transactions, and some corridors reported record-high asking rents. Despite challenges remaining, prime product is leading the rebound.
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Supply Tightens, Rents Rise
The fourth quarter saw average asking rents climb 3.5% year-over-year to $76 PSF, the highest level since October 2020. Sublet inventory fell below early pandemic benchmarks, with further tightening evident as the overall availability rate dropped for the seventh straight quarter to 13.9%.
This represents the longest run of shrinking or steady supply since 2007, suggesting landlords are regaining some leverage—especially for top assets. Despite fluctuations in occupancy levels, asking rents for prime Class A buildings have continued to climb, reinforcing tenant appetite for premium space even amid broader market challenges.
Sector Activity on the Upswing
The financial, insurance, and real estate sectors led Q4 leasing with 37%, followed by the TAMI segment (technology, advertising, media, information) at 34%. Professional services held a 14% share. The uptick in tech-sector leasing signals growing momentum beyond financial services, hinting at broader tenant confidence in the Manhattan office market.
