The recovery in the Manhattan office sector continues to impress, with activity not only back to pre-pandemic levels — but you'd have to go back to when Barack Obama was the President when the market last boomed like now.
In 2025, there were a total of 42.9 million square feet of signings in the borough, which was the highest annual number since 2014 and up 20.1 percent year-over-year, a market report from Savills finds.
Office in Manhattan can be defined in four words: a fight to quality. Of the 11.2 million square feet of total leasing posted in the fourth quarter, almost 70 percent of it came from Class A properties. Interestingly, Downtown is starting to pick up interest with availability for premium space becoming more limited in Manhattan, according to Savills.
"Downtown’s recovery has lagged, but activity is likely to accelerate in 2026 as some demand from Midtown shifts Downtown among tenants pursuing greater optionality and favorable terms," the brokerage said.
Downtown's availability in the fourth quarter plunged to the lowest levels since the first quarter of 2021, with the rate at 19.9 percent. Manhattan's overall availability dropped by 310 basis points year-over-year to 15.5 percent. Also, leasing activity in Downtown at 2.2 million square feet was the strongest posted since the fourth quarter of 2019. This is further evidence that the signs are there for more potential, as the submarket catches up to the rest of the borough.
Some other notable stats for office as a whole in Manhattan were sublease availability falling to the lowest level since the third quarter of 2019 and overall rents rising by 2.8 percent to $77.57 per square foot.
Bloomberg signed the biggest lease in the fourth quarter, thanks to its 492,600 square foot renewal in Grand Central. That was followed by Moody's (460,000 square foot relocation) and Millennium Management's 410,357 square foot renewal.
Going forward, Savills forecasts that rents overall will continue to accelerate and that tenant demand will shift not only toward Downtown — but to "well-located Class A- and Class B buildings."
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