Manhattan Office Leasing on Track for Strongest Year Since 2000

A surge in large-scale office deals pushed Manhattan leasing activity sharply higher in May, putting the market on track for its strongest year since the dot-com era.

Leasing momentum: Manhattan office leasing totaled 4.24M SF in May, up 17.3% from April and more than 50% above the market’s 10-year average, according to Colliers. The strong performance adds to an already active year and signals continued demand for high-quality office space.

Mega deal leads the way: The biggest transaction of the month was Simpson Thacher & Bartlett’s 916,000-SF lease at 570 Fifth Avenue, the second-largest office lease signed in Manhattan so far this year. Other major deals included Google’s 410,556-SF renewal at 315 Hudson Street and Versant’s 249,054-SF lease at 229 West 43rd Street.

Record-setting pace: Year-to-date leasing volume reached 19.63M SF, nearly 10% higher than the same period in 2025. Colliers estimates that if activity continues at the current rate, 2026 would record Manhattan’s highest annual leasing volume since 2000.

Rents keep climbing: Average asking rents increased 0.3% month over month to $77.76 PSF, the highest level since August 2020. Downtown Manhattan posted the strongest monthly gain, with rents rising 1.7% to $63.28 PSF.

Availability tightens: The availability rate fell 20 basis points to 13.2%, while net absorption turned positive at 740,000 SF. Total available office inventory declined to 69.18M SF, the lowest level recorded since October 2020.

➥ THE TAKEAWAY

Recovery gains traction: Manhattan’s office market continues to benefit from large corporate commitments, tightening availability, and rising rents. With leasing activity running well ahead of last year’s pace, the market is showing its strongest signs of sustained recovery since the pandemic era.

➥ New York City will cap CityFHEPS broker fees at one month’s rent, replacing the current 15% commission structure as part of a broader effort to curb soaring voucher program costs.

➥ Tishman Speyer fully leased The Wheeler in downtown Brooklyn after Brooklyn Defender Services signed a 212,000 SF, 31-year headquarters lease spanning six floors.

➥ Moody’s estimates a five-year New York City rent freeze could lead to defaults on 8.3% of loans backed by rent-stabilized properties, raising concerns about financial strain across the sector.

➥ FDNY says aging rent-stabilized buildings and deferred maintenance are contributing to a sharp rise in severe fires across the Bronx, raising safety concerns.

➥ Global Holdings is investing $30M to restore 99 Park Avenue’s Art Deco character and add upscale amenities as it seeks to attract tenants and reinforce the tower’s 97% occupancy.

➥ NYC plans to fast-track court cases against negligent landlords, targeting severe housing violations, unsafe buildings and chronic code offenders.

➥ A New York appellate court ruled that Harry Macklowe cannot make 432 Park Avenue’s condo board cover his legal costs in the ongoing construction-defect lawsuit.

New York’s industrial market is stabilizing as demand for small-bay warehouses offsets weakness in larger logistics properties, with vacancy expected to level off at 9.1% in 2026.

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