The strong office leasing momentum that Manhattan has been seeing in the post-pandemic world has come to a halt. The 2.23 million square feet in volume posted in February, whether you want to look at it from a monthly or annual basis, was down significantly, a market report from Colliers shows. Compared with January, leasing activity plunged by 39.5 percent, with the amount down by 29.7 percent versus February 2025.
"Unlike January's leasing volume, which included six separate large (100,000+-sq.-ft.) transactions, February's velocity included only two 100,000+-sq.-ft. leases," Colliers explained.
"The demand in February was also the lowest since September 2024 and was 19.0% below the ten-year monthly average (2.76M SF)."
By submarket, Midtown South took the biggest hit month-over-month, with volume declining by more than 50 percent. On a year-over-year basis, Downtown struggled even more, with activity plummeting by 70 percent.
Fanatics signed the largest lease in February, taking 213,092 square feet at 95 Morton Street in Midtown South, followed by Latham & Watkins, which extended by 131,354 square feet at 1285 Avenue of the Americas to take its total footprint to 251,354 square feet at the building. New York City District Council of Carpenters Benefit Funds rounded out the top three, expanding to 86,945 square feet in Midtown South.
In addition to weak leasing volume, February saw the availability rate tick up 10 basis points to 13.6 percent. This was the first time the category had risen in two years, according to Colliers. Also, net absorption was negative, coming in at -200,000 square feet in February.
But it wasn't all bad news. Most notably, Manhattan office rents continued to grow, rising by 0.3 percent to $77.22 per square foot, marking the ninth straight month of gains. Plus, rents are averaging the highest level seen since August 2020.
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