Crowds stroll via midtown Manhattan on Oct. 16, 2025 in New York Metropolis.
Spencer Platt | Getty Photographs
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Workplace leasing in Manhattan surged considerably greater within the fourth quarter of 2025, pushed by continued return-to-office and elevated tech hiring, particularly for synthetic intelligence.
Leasing elevated by greater than 25% from the third quarter to 11.87 million sq. ft, in keeping with Colliers. Demand was 16% greater 12 months over 12 months, near 52% above the five-year quarterly common and 43.5% above the 10-year common.
It was the island’s strongest single quarter of leasing because the fourth quarter of 2019, Colliers discovered. For all of 2025, leasing quantity was the best since 2019 and simply 2.4% beneath 2019’s pre-pandemic whole.
“Manhattan’s sturdy efficiency in 2025 was not out of the blue, however was as an alternative the continuation of a restoration that we started to really feel in 2024,” stated Frank Wallach, govt managing director for New York analysis and enterprise growth at Colliers.
“Demand in 2025 was a continuation of that development, although drastically accelerated by elements similar to tenant flight to high quality to draw and retain expertise, return-to-office development implementation, sizeable expansions by main tenants – similar to Amazon, NYU and BlackRock – and the rising AI trade leasing area all through Manhattan,” he stated.
Wallach additionally famous an uptick in demand from varied industries, together with finance, tech, authorized, schooling, medical nonprofit and authorities.
The availability of obtainable workplace area continues to be a lot greater, up almost 37%, than it was in the beginning of the pandemic in March 2020, however a lot decrease than the post-pandemic peak in February 2024, in keeping with Colliers. As demand rises, the oversupply is slowly being absorbed, and Manhattan now has the tightest provide since November 2020.
Tighter provide helps to lastly increase rents. Manhattan’s common asking hire was 1.5% greater in This fall than the earlier quarter and, at $76 per sq. foot, was Manhattan’s highest common since October 2020, Colliers discovered. For the best stage, so-called Class A product, which is newer development, the typical asking hire elevated 1.6% to $83 per sq. foot, Colliers stated.
Class B workplace product is older however tends to be in good places. It’s now seeing landlords spend money on upgrades and renovations as demand will increase. That helped rents in This fall develop 1.1% to a report excessive of $68.61 per sq. foot, in keeping with Colliers.
There continues to be a flight to high quality, with 69% of all leased area in four- and five-star buildings, up from 66% in 2024, in keeping with a separate report from CoStar. It discovered that each one of many 15 largest workplace leases signed in the course of the 12 months came about in four- or five-star properties. For instance, Deloitte’s 800,000-square-foot dedication at 70 Hudson Yards, a premiere Manhattan workplace constructing, was the biggest lease of the 12 months.
Quarterly web absorption total, which is a measure of how a lot bodily area tenants are literally occupying versus how a lot area they’re leaving, was optimistic by near 4 million sq. ft, in keeping with the Colliers report. For all of 2025, it was optimistic by 15.56 million sq. ft, together with 2.14 million sq. ft of area faraway from the marketplace for deliberate conversion to nonoffice use.
“Critically, the restoration and robust demand in 2025 was additionally fostered by tens of millions of sq. ft of constructing conversions to nonoffice use, spurring a wave of leasing by tenants relocating out of these buildings,” stated Wallach.
Regardless of the advance out there, there may be nonetheless much more surplus workplace provide than there was earlier than the pandemic.
“Regardless of the elevated tenant demand and tightening availability in 2025, the Manhattan workplace market has solely shed half of its post-pandemic extra out there provide. The wholesome demand recorded in 2025 and conversions of underutilized workplace property should, subsequently, proceed in 2026 and 2027,” Wallach stated.
