Manhattan Office Market Cooled In January

2 February 2026

After a record December, Manhattan’s office market hit a seasonal slowdown in January.

Manhattan’s leasing activity totaled almost 3.7 million square feet, down nearly 30 percent from December but a slight increase year over year, according to a new Colliers report. The drop was not surprising, as January declines occurred in six of the past ten years, and December posted the highest monthly leasing volume since 2019, per Colliers.

Midtown nabbed the top two deals, led by law firm Gibson Dunn’s 362,000-square-foot renewal at Irvine Company’s MetLife Building. Landlord BXP scored the second-largest deal, Global insurance and investment firm C.V. Starr’s 274,000-square-foot new lease at 343 Madison Avenue, per Colliers. The third-largest was Burlington Stores’ 206,000-square-foot extension and expansion at Empire State Realty Trust’s 1400 Broadway in Midtown South.

The availability rate tightened to 13.5 percent, marking the 23rd consecutive month of stable or decreasing supply. Sublet supply fell for the 16th straight month to 10.7 million square feet, a 38 percent year-over-year decrease and the lowest since September 2019. Asking rents averaged $77 per square foot, up about 5 percent year over year, but still about 3 percent below March 2020.

Midtown captured 47 percent of the month’s activity as availability crept almost back to March 2020 levels, when it was only 7.7 percent lower. Midtown South followed a similar trend, with large deals helping push leasing activity almost 73 percent above the ten-year average. Despite leasing lagging, even Downtown sublet space tightened to its lowest point since mid-2020, while rents rose to levels not seen since February 2021, per Colliers.

Manhattan was coming off a hot quarter, posting its strongest results since before the pandemic. Leasing activity jumped more than 25 percent quarter over quarter at the end of last year.