NEW YORK CITY – Third quarter results indicate that the Manhattan office market recovery continues to gain momentum, marking the fifth consecutive quarter of positive trends in absorption, availability and leasing, according to new research from Transwestern Real Estate Services (TRS).
Manhattan leasing totaled 8.7 million square feet in the third quarter, a decline from last quarter, but leading to a year-to-date total of 28.2 million square feet that exceeds the comparative figure for 2024 by 12%. Direct availability levels declined for a fifth straight quarter, closing Q3 at 14.8%, down three percentage points year-over-year. Net absorption has also remained strong, extending its positive streak of five quarters.
“Manhattan’s office market is entering the final months of 2025 on a positive five-quarter trailing run, supported by consistent demand from stalwarts like financial services, banking and law firms, as well as tech and even AI companies,” said Corrie Slewett, Research Manager, Transwestern. “The Midtown submarket continues to outperform, but Downtown and Midtown South have posted solid gains through this period. Asking rents have not matched the pace of improvement in leasing and absorption , though current conditions remain favorable for tenants.”
Additional highlights from the report include:
- A dozen leases exceeding 100,000 square feet were signed this quarter, all in the Midtown submarket, with the largest being Deloitte’s 807,000-square-foot deal at 70 Hudson Yards.
- Quarterly net absorption totaled 3.6 million square feet, bringing year-to-date absorption just over 11 million square feet.
- Both overall availability and sublet availability, now at 2.8%, are at their lowest levels since 2020.
- Asking rents increased a smidge from last quarter to $73.02 per square foot, and are approximately 4.6% below year-ago levels.
- The construction pipeline remains near historical lows, at just 3.2 million square feet, with an additional 10.6 million square feet of proposed Class A space projects.
Download the Q3 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.
Media Contact:
Dan Foley
508.272.0017
dan.foley@transwestern.com
twmediarelations@transwestern.com
Corrie Slewett
Research Manager - New York | National Tenant Advisory Research Leader
New York, New York
