Manhattan office leasing is poised for its best year since 2019

Manhattan’s office market is finding its groove again.

Since the coronavirus pandemic, leasing volumes have surged to levels not seen in years. 

New data from Colliers shows that tenants signed 3.7 million square feet of deals in August — a leap of more than 20% from July and well above the city’s 10-year monthly average. 

At this pace, 2025 could close with more than 40 million square feet of commitments, a milestone last achieved in 2019.

For Franklin Wallach, executive managing director at Colliers, the momentum speaks for itself. 

“That is a very strong market in terms of demand,” he told CNBC in an interview. 

Driving the surge are factors ranging from low unemployment to renewed interest from industries that slowed during the pandemic. 

“Certainly a return to office is a part of that — and low unemployment. You also have a reemergence of some key industries that were a little quieter during the pandemic years, not that they ever went away, but tech in particular comes to mind,” Wallach added.

Amazon has been one of the biggest players, gobbling up more than a million square feet of space since late 2024 through leases, subleases and even deals with coworking firms like WeWork. 

The legal sector, meanwhile, has been on a roll. Law firms inked over 4 million square feet in 2023, setting a record, with volumes last year still topping 2019 benchmarks.

Much of the action has clustered in Manhattan’s newest towers, where demand has outpaced supply. 

“You also very much had flight to quality. New construction such as One Vanderbilt, Hudson Yards, Manhattan West, where availability has become very tight in that new product,” Wallach said. 

Availability in these newer buildings has slipped to just 6.7%, compared with 17% in prewar offices, pulling Manhattan’s overall rate down to 15% — its lowest since early 2021.

That tightening is showing up in rents. 

Asking prices climbed 1% in August to $74.73 per square foot, though still trail pre-pandemic averages by about 6%. 

Landlords, Wallach noted, are beginning to push their numbers higher. 

“If you have a 1% increase during the month, that is a significant movement. Some of that is above-average-priced space coming onto the market, but we’ve also begun to see more landlords reprice their existing space higher,” he said.

Conversions are also reshaping the picture. 

Nearly 9 million square feet of offices have been removed from the market over the past four years, according to Colliers. 

“We’ve seen, on average, that for every million square feet of office building slated for conversion, on average 270,000 square feet of leasing activity occurs because of the tenants coming out of that building and relocating to another building,” Wallach explained. 

Many of the buildings headed for redevelopment were cheaper sublet spaces, meaning their disappearance has nudged average prices upward.

For now, the market looks steadier than it has in years. Demand is rising, supply is tightening and even the city’s priciest addresses are filling up again.