Manhattan Office Leasing Hit 43M SF In Year That Redefined The Market

As the lights get taken down and the trees get placed by the curb, final 2025 market data has started to be tallied and published. The early returns show the balance of power in the world's most valuable office market has shifted back to landlords.

Companies signed roughly 43M SF of leases for Manhattan office space last year, according to brokerage firm Savills. That is the most of any year since 2014 and 20% more than last year.

Manhattan's availability rate hit 13.9% at the end of the year, down from 16.5% in December 2024, according to Colliers. That figure was helped along by more than 2.1M SF of office space removed from the market for planned conversions.

“The year 2025 will be remembered as a watershed moment in the Manhattan office market’s recovery,” Franklin Wallach, Colliers' executive managing director of research in New York, said in a statement. “Tenant demand practically matched the pre-pandemic volume while supply has tightened for the longest continuous quarterly period in nearly twenty years.”

The drop in availability has been felt most acutely in the top tier of buildings. Trophy space availability in Midtown has fallen to 3.4%, according to Savills, pushing asking rents for those buildings up 12% from last year to $191 per SF.

With the best-quality space in such short supply — and millions of square feet of older space being taken off the market — the pool of landlord winners is finally growing. 

Class-B asking rents in Manhattan hit a record $68.61 per SF in the fourth quarter, up 1.1% from Q3, according to Colliers. Class-C office landlords pushed their asking rates up by 3.4%.

While Manhattan's overall asking rents are still slightly below their pre-pandemic status, they went up 3.5% year-over-year, driven by some lower-cost blocks being leased up or removed from the market and other landlords raising their asking rates, per Colliers.

But while asking prices are coming up across the board, the vast majority of companies are still choosing the best buildings: 70% of leases signed in Q4 were at trophy and Class-A properties, according to Savills, despite making up roughly 58% of the inventory.

But the geography of where those deals are getting signed — and who is signing them — also expanded toward the end of last year. 

Downtown Manhattan had its best three-month period for leasing activity since 2019 in Q4, fueled by Moody's 460K SF lease to move to Brookfield Place and the New York Attorney General's 378K SF renewal and expansion at 28 Liberty St. 

Midtown South benefited from the return of tech to the leasing market, with Monday.com, Robinhood and Rippling all signing deals of 125K SF or more in the submarket. Artificial intelligence companies leased 1M SF combined over the year, the vast majority of which was concentrated in the tech-heavy part of town, according to Savills.

While high interest rates and pockets of distress are still causes for landlord concern, there is heavy optimism that the momentum will continue into 2026. The first two major office towers to rise since the pandemic broke ground last summer from Related at 70 Hudson Yards and BXP. Several other developers — including SL Green, Vornado, RXR and Extell Development — are gearing up to start building new towers.

Tenants also seem to be coming to grips with the new dynamic. Roughly 7.3M SF of offices were taken off the Manhattan sublease market in 2025, reducing the amount of space offered for sublease overall by nearly 40%.