Manhattan Office Rents Climb 28% as Demand Broadens Past Trophy

Manhattan's office rebound is spreading well beyond trophy towers as availability hits its lowest since 2020.

October 06, 2026

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Manhattan Office Rents Climb 28% as Demand Broadens Past Trophy

Good morning. Manhattan's office recovery is no longer just a trophy story. New-lease rents jumped 28% over the past year, and even lower-tier space is gaining real pricing power.

🎙️ No Cap Encore: While the guys take a short break, we're revisiting No Cap's most-watched episode to date: Bob Knakal on NYC real estate, dealmaking, and four decades in the business.

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Market Snapshot

Most Active Neighborhood

By Deal Count

Bedford-Stuyvesant — 9 sales

Properties Sold

All Asset Types

137

Transaction Volume

Sales Activity

$1.03B

Top Office Submarket

Avg Starting Rent

Hudson Yards

$158.50 / SF

Manhattan Office Rent

Avg Effective

$83.69 / SF

Office Rent Growth

YoY Change

+17.5%

*Office metrics courtesy of CompStak; data from 4/01/26 to 6/30/26. Sales metrics courtesy of Actovia; NYC properties reported sold during the week of 8/7/26 – 8/13/26.

Wider Net

Manhattan Office Rents Climb 28% as Demand Broadens Past Trophy

Manhattan's office recovery is reaching well beyond its best buildings. New direct-lease rents averaged $99 per SF over the trailing 12 months through September, up 28% year over year, according to an Avison Young report cited by GlobeSt.

By the numbers: Rents are moving fast. Base rents rose 23% to $120 per SF, and some space cleared $375 in the quarter. New-lease pricing averaged $99 per SF, up more than a quarter from a year earlier.

Leasing holds up: Volume reached 30.2M SF year to date, roughly flat but 10.4% above 2024 and the second-strongest pace through a third quarter since 2014. Proskauer Rose led with 448,000 SF at 11 Times Square, trailed by Havas at 254,000 SF and Morgan Lewis at 210,000 SF.

The tiers converge: Here is the real shift. Class A and Class B/C base rents differ by $10 per SF but produce comparable $83 per SF net effective rents, so concessions, not raw demand, now separate the grades.

Source: Avison Young Market Intelligence, CoStar

Supply keeps tightening: Overall availability dropped 290 basis points to 13.4%, the lowest since 2020. Trophy availability fell to 10.1%, Midtown Core to 10.0% and Hudson Yards to just 3.7%.

Back at the desk: Return-to-office is doing work. Avison Young's busyness tracker hit 86.2% of pre-pandemic levels against a 70.8% national average, with consulting, research and accounting firms running at 261.7%.

➥ THE TAKEAWAY

Fewer places to hide: Premium space is scarce, so tenants priced out of trophy towers are fanning into lower-tier buildings. That spillover is what keeps pushing rents higher and concessions lower across every class, and with the pipeline thin it is unlikely to reverse soon.

Around New York

➥ Manhattan trophy vacancy fell to a cycle-low 4.9%, steering tenants toward Third and Lexington avenues as 23 leases this year cleared $250 per square foot and 11 topped $300.

➥ A looming maturity wall puts $8.7B of New York commercial loans due within 12 months, 58% of it office, as mostly 2017-vintage debt hits a far tougher rate market.

➥ The city named 12 districts where affordable-housing rezonings clear in 90 days instead of seven months starting January 1, aiming to spread new supply beyond a few neighborhoods.

➥ Midtown availability dropped to 27.7M SF, back to March 2020 and the first New York submarket to erase its pandemic losses, with Class A asking rents at a record $85.45.

➥ A Bushwick walk-up deregulated after a $400K overhaul has been ordered back into stabilization, a test case that could reshape how owners treat substantially rehabbed buildings.

➥ Manhattan listing inventory fell year over year for a fourth straight quarter even as condo and co-op sales rose 8%, holding the median price at a record $1.25M as high mortgage rates keep sellers put.

Follow the Money

OFFICEMIDTOWN DRA Advisors acquired a 49% stake in Rithm Capital’s fully leased 1301 Avenue of the Americas, valuing the 1.7M SF tower at $1.3B.

RESIDENTIALMANHATTAN The median apartment price held at a record $1.25M for a second straight quarter, up 5.9% year over year as thin supply keeps values climbing.

MULTIFAMILYHARLEM The Olnick Organization refinanced Lenox Terrace with about $171M in permanent debt, covering 1,696 mostly rent-regulated units across six towers.

OFFICEMIDTOWN Silvercrest Asset Management leased the entire 41,000 SF 12th floor at 1345 Avenue of the Americas, where i80 Group took 17,000 SF at a $120 asking rent.

MULTIFAMILYUNION SQUARE An Alcion-Slate venture sold the 133-unit 60 East 12th Street for $82.5M, well below the $107.5M it paid in 2019, as Alcion winds down and unloads assets.

OFFICEMIDTOWN Malaysia’s Maybank leased the entire 8,629 SF 24th floor at 575 Madison Avenue, relocating from 400 Park in another bet on prime Midtown space.

📈 CHART OF THE WEEK

New York leads U.S. cities in the global rankings, while Seattle, San Francisco, Boston and San Jose also place in the worldwide top 10, highlighting the strength of major U.S. economic and talent hubs.