New York office market report
Q1 2025
Q1 2025 leasing activity in the Manhattan office market has reached 10.1 million square feet (msf), the highest first quarter amount since 2018. The overall availability rate dropped to 17.3%, the lowest value since 2020. Leading the way in leasing activity, trophy properties accounted for 61.6%, reaching a decades-long high.
Q1 2025 leasing activity, fueled by large transactions, hits highest Q1 value since 2018
Q1 2025 leasing activity in Manhattan has reached 10.1 million square feet (msf); 20.8% higher than that of Q1 2024.
The number of 100k+ square feet (sf) transactions in Q1 2025 has reached the highest first quarter amount since 2018 with 14 transactions. This increase in leasing activity has been led by the banking, finance, insurance & real estate industry, which has accounted for just under half of all activity this quarter.
Manhattan availability rate hits lowest value since 2020
Manhattan’s overall availability rate of 17.3% in Q1 2025 marks the lowest availability rate in over four years. Year-over-year, the overall availability rate dropped by 240 basis points (bps) from 19.7%. This drop came from a decrease in both direct and sublet available space, which currently sit at 72.0 msf and 16.4 msf, respectively.
However, when considering factors such as conversion candidates, property class, and other extenuating circumstances, the availability rate is even lower.
Trophy building’s share of leasing activity reaches decades-long high
Though it makes up only the top 10% of inventory, trophy leases accounted for the largest share of leasing activity by class by a wide margin. This share is up significantly compared to Q1 2024 in which trophy leases accounted for only 32.1% of activity.
Landlords of trophy and trophy+ buildings are continuing to benefit from the flight to quality trend, with occupiers actively choosing pricier rents and competing for footprints in better quality buildings.
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