Prime Highlights:
- Manhattan office leasing surged over 25% in Q4 2025, marking the strongest quarterly performance in six years.
- Demand across finance, tech, legal, education, and government sectors drove record leasing volumes and higher rents.
Key Facts:
- Average asking rent reached $76 per square foot, with Class A offices at $83 and upgraded Class B offices at $68.61.
- 69% of leased office space was in four- and five-star buildings, reflecting a shift toward premium properties.
Background:
Manhattan’s office leasing market ended 2025 strongly, with the fourth quarter marking the best performance in six years. Leasing rose more than 25% from the previous quarter, reaching 11.87 million square feet, according to Colliers. For the year, total leasing was the highest since 2019 and just 2.4% below pre-pandemic levels.
The rebound was driven by growing demand from several sectors, including finance, technology, legal, education, medical nonprofits, and government. Analysts say the increase is due to the return-to-office trend, major corporate expansions, and more hiring in tech. Key tenants like Amazon, NYU, and BlackRock played a major role in the activity.
“Manhattan’s strong performance in 2025 continues the recovery we began seeing in 2024,” said Frank Wallach, executive managing director for New York research and business development at Colliers. “Tenant demand was further accelerated by relocations to higher-quality buildings, sizeable expansions, and conversions of office space for non-office uses.”
Despite the recovery, the supply of available office space remains higher than pre-pandemic levels, though it has tightened since its post-pandemic peak in early 2024. Rents are rising, with the average at $76 per square foot. Class A offices average $83 and upgraded Class B offices $68.61. Most leased space, 69%, is now in top-tier buildings. The largest leases of the year, including Deloitte’s 800,000-square-foot commitment at 70 Hudson Yards, were all in top-tier properties.
Quarterly net absorption was nearly 4 million square feet, and for the year, it reached 15.56 million square feet, including space taken off the market for planned conversions. Although the market is recovering, Manhattan still has extra office space, and continued leasing and conversions will be important for growth in 2026 and beyond.
