MANHATTAN OFFICE MARKET POSTS THIRD CONSECUTIVE QUARTER OF STRONG RESULTS

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NEW YORK CITY – The Manhattan office market closed its third consecutive quarter of strong results, posting 9.1 million square feet in second quarter leasing, one of the highest absorption totals in a decade, and tightening availability figures, according to new research from Transwestern Real Estate Services (TRS).

Combined with a similarly strong first quarter, leasing activity for the first half of the year totaled 19.3 million square feet, approximately 20% higher than the same period in 2024. Similarly, net absorption for the first half of the year approached 7.5 million square feet, the highest first-half total in at least 15 years.

“The results for the first half of 2025 have been very strong, particularly with absorption, availability and leasing velocity,” said Corrie Slewett, Research Manager, Transwestern. “We’re now on a three-quarter streak of very solid results, which certainly constitutes a trend. There is a tendency to still want to ask if we’ve ‘turned a corner' in relation to the pandemic, but I’m not sure that’s a relevant question anymore. The three-quarter trend would suggest we are on very solid footing and that current economic conditions should be our real focus for CRE, not the pandemic and its effects.”

Additional notable results from the report include:

• A half dozen leases topping 100,000 square feet were signed in the quarter, led by a 1.1 million square foot master lease by New York University in Midtown South.
• Absorption for the past four quarters sums to almost 16 million square feet, the largest four-quarter total in a decade.
• Both overall availability and sublease availability dropped to their lowest levels since 2020, at 15.5% and 3.1%, respectively.
• Rents decreased to $72.98 per square foot, as high-priced space was leased leaving lower-priced space on the market.
• Asking rents are currently 10.4% below their 2020 peak.

“If a soft spot remains in the market, it’s in the construction pipeline, which remains at historic lows with just 4 million square feet in Q2,” continued Slewett. “That could change for the positive, as there is about 15 million square feet of core office proposed across Manhattan.”

Download the Q2 2025 Manhattan office report here.

About Transwestern Real Estate Services
Part of the Transwestern companies, Transwestern Real Estate Services (TRS) strives to add value for investors, owners, and occupiers across all commercial property types. Fueled by a holistic perspective of the real estate life cycle, agility and creativity are hallmarks of our approach, while vast national resources and sound market intelligence underpin customized recommendations and property solutions.

Four dynamic, integrated companies make up the Transwestern enterprise, giving us the perspective to think broadly, deeply and creatively about commercial real estate. Clients and investors rely on us for expertise that spans institutional and opportunistic investment, development, hospitality, and brokerage and asset services. Our award-winning, collaborative culture empowers team members with resources and independence to work across boundaries in pursuit of innovative solutions, reinforcing a reputation for service excellence that translates to measurable results. Through offices nationwide and alliance partners around the globe, we positively impact the built environment and our communities while fostering a work climate that champions career vitality for all. Learn more at transwestern.com and @Transwestern.

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