From The Real Deal · Mike Romano · · 1m 50s
Manhattan office market rebounds
Manhattan office leasing hits record demand as finance and tech firms drive recovery.
In brief
Manhattan office leasing hits record demand as finance and tech firms drive recovery. Manhattan office market rebounds with record leasing activity, finance and tech firms driving demand while scarcity of new buildings pushes rents to pre-pandemic levels. Originally reported by The Real Deal.
Manhattan office market rebound
Manhattan’s office market is approaching a historic year with leasing on pace for its strongest performance since 2000.
Rent levels return to pre-pandemic
October brought average asking rent reaching nearly $80 per square foot, matching March 2020 levels.
Leasing activity surges
Tenants leased about 4.5 million square feet in October, a more than 50 percent jump from September.
Year-to-date leasing targets
Year-to-date leasing topped 37 million square feet, putting the market on track for roughly 44 million square feet by year-end.
Record market activity
That would make the 2026 market the busiest in 26 years, when leasing hit 50 million square feet.
Finance firms drive demand
Wall Street profits reached nearly $46 billion in the first half of the year, while law firms have accounted for some of the market’s biggest commitments.
Legal deals dominate
Simpson Thacher’s 916,000-square-foot lease at 570 Fifth Avenue was the year’s largest, and October brought another sizable batch of legal deals.
Tech firms add demand
AI firms leased more than 1 million square feet in the third quarter, a record, with nearly all of it in Midtown South.
Scarcity of new buildings
Manhattan hasn’t seen a major new office building open since One Vanderbilt in 2021, outside of JPMorgan Chase’s headquarters.
Office-to-residential conversions
Thirteen major Manhattan projects alone are expected to turn more than 7 million square feet of office space into over 11,000 apartments.
Record rents for trophy buildings
Castle Hook Partners agreed to pay as much as $21.2 million annually for a 53,000-square-foot penthouse at Related’s 625 Madison Avenue.
The bottom line
Manhattan office market rebounds with record leasing activity, finance and tech firms driving demand while scarcity of new buildings pushes rents to pre-pandemic levels.
