- Q125 leasing volume hit 12.2 MSF, the highest since Q419, as demand for office space continues to rebound.
- Top-tier buildings are in high demand, with Class A+ availability falling below 12% citywide and just 7.5% in Midtown.
- Major tenants like Jane Street Capital and Universal Music Group signed some of the largest leases of the quarter.
- Return-to-office momentum is growing, with 57% of workers back in the office and 25% of employers planning to increase attendance further.
A Hot Start to 2025
The Manhattan office leasing market surged in Q125, recording 12.2 MSF of deals—the highest volume in a single quarter since the end of 2019, according to a new report from Savills.
The rebound is being driven by a combination of large-scale renewals and expansions, as well as rising return-to-office trends across key industries.
Big Leases, Big Momentum
Savills identified 16 deals over 100 KSF, including:
- Jane Street Capital’s 400 KSF expansion at Brookfield’s 250 Vesey Street, increasing its footprint to nearly 1 MSF.
- Universal Music Group’s 334 KSF relocation to Vornado’s Penn 2.
- Mayer Brown’s 331 KSF expansion at 1221 Sixth Avenue, owned by Rockefeller Group.
Eight of the ten largest deals were renewals, many with expansion components, reinforcing continued commitment to office space in Manhattan.
Class A Demand Heats Up
Overall office availability dropped to 17.7%—a significant improvement from 20% a year ago. Trophy and Class A+ buildings are seeing the most pressure, with Manhattan-wide availability falling below 12%, and just 7.5% in Midtown.
Savills notes that availability is especially low in core business districts: Hudson Yards (9%), Union Square (11.2%), and Grand Central (13.9%).
Rent Growth in Prime Corridors
While overall asking rents (including sublet space) declined 2.1% YoY, Class A buildings saw a modest 0.5% increase. In premium corridors like Hudson Yards and the Plaza District, asking rents for upper-floor trophy space reached nearly $160/SF. Some leases in those areas exceeded $200 per square foot.
Demand Drivers
The Partnership for New York City reports that average office attendance in Manhattan is now at 76% of pre-pandemic levels. As of mid-March, 57% of workers are in the office on a typical weekday. Real estate firms are leading the charge with 85% in-office attendance, followed by 62% for both financial services and law firms.
While three-quarters of employers consider their current hybrid schedules the “new normal,” 25% indicated plans to increase in-office attendance in the next year.
Looking Ahead
With a tightening supply of high-quality office space and more employers pushing for in-person work, Manhattan’s office market is showing renewed strength—and could see continued momentum through 2025.
