manhattan office Market Surges in January, Exceeding Decade’s Average
Table of Contents
- 1. manhattan office Market Surges in January, Exceeding Decade’s Average
- 2. Large Leases Fuel January’s Success
- 3. Looking Ahead: Optimism for Continued Growth
- 4. Manhattan’s Office Market Rebounds in January 2025
- 5. Availability Rates Hit Multi-Year Lows
- 6. Midtown Emerges as a Leasing Powerhouse
- 7. Asking Rents Show Mild Dip
- 8. Building on 2024’s Momentum
- 9. What factors are making Midtown such a desirable location for businesses right now?
- 10. Manhattan Office Market Booms in January: An interview with Franklin Wallach
- 11. A Resurgent Market: data and Insights
- 12. Midtown’s Ascendance: A hub for Growth
- 13. Looking Ahead: Optimism and Opportunities
Predictions of a robust Manhattan office market in 2025 appear to be coming true. Data from Colliers (CIGI) indicates that the first month of the year witnessed a surge in leasing activity, surpassing the decade’s monthly average.Manhattan saw a remarkable 3.6 million square feet of office space leased in January, marking a 24.4 percent increase from December’s figures and a staggering 56 percent jump compared to the same period last year.
This remarkable performance positions January’s leasing volume over 33 percent higher than Manhattan’s 10-year monthly average of 2.67 million square feet. Franklin Wallach, head of research at Colliers, emphasized this trend, stating, “This is certainly a sign that the robust demand we saw last year has continued in the opening innings of 2025. And the strong activity was complemented by us continuing to see blocks of space come off the market.”
Large Leases Fuel January’s Success
While Wallach suggests that January’s success might be partially attributed to a spillover affect from important leases signed in the fourth quarter of 2024, the month itself witnessed several landmark deals, primarily concentrated in Midtown.
Notable among these deals was the expansion of fashion company KnitWell Group, which secured 246,000 square feet at BXP’s 7 Times Square. The Federal Deposit Insurance Corporation relocated to 147,543 square feet at 1166 Avenue of the Americas, while tech giant IBM expanded its footprint by 92,663 square feet at SL Green Realty’s One Madison Avenue.
Looking Ahead: Optimism for Continued Growth
These significant leasing activities underscore the continued vitality of Manhattan’s office market. The surge in demand, coupled wiht the availability of notable office spaces, paints a positive picture for the remainder of 2025. Companies seeking strategic office solutions in this dynamic market should carefully consider these trends and opportunities.
Manhattan’s Office Market Rebounds in January 2025
Manhattan’s office market kicked off 2025 with a surge in demand, marking a continued recovery from the pandemic-induced slump. Availability rates plummeted to their lowest levels since 2021, while asking rents experienced a modest decline.
Availability Rates Hit Multi-Year Lows
Manhattan’s overall availability rate shrank to 16.2 percent in January, a significant drop from 18 percent recorded in the same period last year. This marks the lowest availability rate the borough has seen since 2021. Midtown, a key hub for the city’s business sector, witnessed an even sharper decline, with its availability rate dipping to 14.9 percent, representing the first time since November 2020 that the rate has fallen below 15 percent.
Midtown Emerges as a Leasing Powerhouse
The resurgence in Manhattan’s office market is particularly evident in Midtown. “After a momentous 2024 — during which Midtown’s demand was the highest since 2018 — its popularity continued in the new year as the top three largest Manhattan transactions all occurred in this market,” said Wallach. “Not only that, Midtown accounted for more than 50 percent of the total January leasing velocity, successfully outpacing its 45 percent share of the total inventory.”
Asking Rents Show Mild Dip
Despite the surge in demand, the overall asking rent in Manhattan experienced a slight decrease to $73.28 per square foot in january. Wallach attributes this to “significant blocks” of above-average priced space coming off the market.
Building on 2024’s Momentum
This positive trend follows a record-breaking 2024 for Manhattan’s office leasing market. The borough witnessed an impressive 33.3 million square feet of deals last year, the highest level of leasing activity since 2019. These figures illustrate a clear rebound in confidence and investment in New York City’s commercial real estate sector.
The continued recovery of Manhattan’s office market presents exciting opportunities for businesses looking to establish or expand their presence in one of the world’s most dynamic cities. As demand outpaces supply in key areas like Midtown, companies that act decisively can secure prime office space and gain a competitive edge.
What factors are making Midtown such a desirable location for businesses right now?
Manhattan Office Market Booms in January: An interview with Franklin Wallach
ManhattanS office market saw an impressive surge in activity during January 2025, exceeding the decade’s average leasing volume. To shed light on this positive trend,we spoke with Franklin Wallach,head of research at Colliers,a leading commercial real estate firm.
A Resurgent Market: data and Insights
Archyde: Franklin, January saw a remarkable surge in office space leasing in Manhattan. Could you elaborate on the key factors driving this positive trend?
Franklin Wallach: Certainly! This fantastic performance signifies the continued, robust demand we witnessed late last year. It’s not just a continuation; we’re also seeing engaging shifts in the market with further prominent blocks of space coming off the market. This combination is really pushing leasing activity forward.
Archyde: How does this January surge compare to previous years and overall market trends?
Wallach: January’s leasing volume was a significant 56% jump compared to the same period last year and a staggering 33% higher than the 10-year monthly average. This demonstrates a clear rebound in confidence and investment in New York City’s commercial real estate sector.
Midtown’s Ascendance: A hub for Growth
Archyde: Midtown seems to be leading this resurgence. What factors are making Midtown such a desirable location for businesses right now?
Wallach: Midtown is undeniably experiencing a very strong period. Not only did it see the highest demand since 2018 last year, but the trend continued into the new year. In January alone, the top three largest Manhattan transactions occurred in Midtown. It’s attracting a diverse range of businesses, contributing to its vibrant atmosphere and strengthening its position as a major business hub.
Looking Ahead: Optimism and Opportunities
Archyde: What are your predictions for the rest of 2025 and beyond for Manhattan’s office market?
Wallach: The momentum we’ve seen gives us strong reason for optimism. We anticipate continued demand, especially in prime locations like midtown. This means businesses that act strategically and decisively will be well-positioned to secure the best office spaces and benefit from this dynamic market.
I think it would be interesting to hear what other businesses and individuals think about the current trends in Manhattan’s office market. Are you optimistic about the future? Share your thoughts in the comment section below!
