Manhattan’s Office Market Back on Offense

2 October 2025

Manhattan’s office market is flexing again.

Big-name tenants like Deloitte, Guggenheim Partners and Salesforce inked massive deals in the third quarter, fueling Manhattan’s strongest year for office leasing since George W. Bush was in the White House.

Tenants gobbled up 9.4 million square feet — a 2 percent bump from the second quarter and nearly 27 percent higher than the five-year quarterly average, according to a new Colliers report. Leasing volume surpassed 30 million square feet for the entire year, blowing past pre-Covid levels and marking the strongest period of year-to-date demand since 2002.

If the third-quarter pace holds, the year will end north of 40 million square feet — about 20 percent higher than 2024, per Colliers. But it could still fall short of 43 million square feet of leasing activity in 2019.

Deloitte’s 807,000-square-foot lease at Related’s 70 Hudson Yards was the largest lease of the quarter, and the third-largest deal of the year so far. Guggenheim Partners locked down the second-largest, a 359,000 square-foot renewal and expansion at Munich Re’s 330 Madison Avenue. Salesforce’s 311,000-square-foot renewal and expansion at La Caisse’s 3 Bryant Park was the third-largest deal.

Demand is finally cutting into the post-Covid glut of empty space. Availability fell to 14.6 percent, the lowest since December 2020, after six straight quarters of tightening. Sublet supply — once a pandemic-era albatross — has shrunk nearly 40 percent in two years and is back near pre-pandemic levels.

Rents are creeping up, too. The average asking rent hit $74.89 per square foot, its highest since late 2023 but still almost 6 percent below March 2020. Class B offices posted the biggest jump, up 3.2 percent to $67.83, while Class C space sank to a decade-plus low.

Investors are sniffing around again as well. Eleven office buildings traded hands for $1.6 billion in the third quarter, including RXR, Elliott Investment Management and Baupost Group’s $1 billion purchase of 590 Madison Avenue.

“There were continued signs of the Manhattan office market recovering in virtually every measurable way during the third quarter,” said Colliers’ Franklin Wallach. “Although the march towards recovery has been building… the momentum must continue through the end of 2025 and into 2026 for full recovery to be achieved.”