Manhattan office leasing velocity had its biggest quarter since the fourth quarter (Q4) of 2019.
In Q4 2025, office leasing on the island increased by more than 25% from Q3 2025.
Leasing activity in the final quarter of 2025 was also 43.5% higher than the ten-year average and 52% above the five-year average. Demand was also 16% higher year-over-year.
Colliers New York Executive Managing Director of Research & Business Development, Franklin Wallach, said tenant demand had almost reached pre-pandemic volumes, with leasing volumes just 2.4% of 2019’s total and 25% more than in 2024.
“All the while, sublet inventory fell below the March 2020 benchmark, more $150.00+/SF and $200+/SF deals closed compared to 2019, and some corridors recorded record-high asking rents,” he said.
However, Wallach said supply hds “tightened” for the longest continuous quarterly period in nearly 20 years.
Supply grew by 36.7% since March 202, but fell 17.5% since December 2024 and is substantially lower than the peak of 98.05M SF in February 2024 at 73.61M SF in December 2025.
“The Manhattan office market has only shed half of its post-pandemic excess supply. The healthy demand recorded in 2025 and conversions of underutilised office assets must, therefore, continue in 2026 and 2027,” Wallach said.
The tighter supply has boosted rent prices, with the asking prices rising by 1.5% in Q4 from the previous quarter.
It also reached the highest average since October 2020 at US$76 per square foot.
People were leasing more on the expensive end, with a separate report from CoStar finding that a record 313 leases started at US$100 per square foot or more across signed across Manhattan in 2025. This significantly surpasses 2024’s record of 212 leases.
Related content
