Office Availability Rises Across Manhattan

Leasing Dips, Availability Climbs

The Commercial Observer reports that Manhattan’s office market saw a reversal in February, according to Colliers data, with office availability increasing for the first time in two years. Total office leasing activity reached just 2.23M SF for the month, marking a steep 39.5% decrease from January and falling 29.7% below February 2025 levels.

The market’s availability rate in Manhattan rose by 0.1% to 13.6%, representing roughly 200,000 SF of negative absorption as supply outpaced demand. This shift signals a cooling in demand after several quarters of gradual improvement for office space.

Mixed Performance by Submarket

While overall office availability increased, Midtown South and Lower Manhattan held steady, with rates at 13.3% and 16.3% respectively. This stability points to localized resilience in certain pockets, despite the broader uptick in office space supply.

Colliers noted positive signs, including Manhattan’s average asking rents reaching their highest point since August 2020. In addition, available office supply has dropped by more than 25% since February 2024, underlining ongoing structural changes in the market. That tightening trend has been especially visible in high-end buildings, where strong demand for premium space has helped push availability lower even as overall leasing activity fluctuates.

Significant February Transactions

The largest office deals in February included Fanatics’ 210 KSF lease at 95 Morton Street, Latham & Watkins expanding to 251,354 SF at 1285 Avenue of the Americas, and Snowflake taking 82,505 SF at 7 Times Square. Other notable transactions were signed by Datasite and the NYC District Council of Carpenters Benefit Funds, all highlighting selective but significant occupier demand even amid a softer overall leasing environment.