There is no summer crash for Manhattan’s office market, where available space is dwindling, rents are rising and Midtown has become an important milestone.
The amount of available office space in Midtown fell to 27.7M SF at the end of the third quarter, matching the figure from March 2020, according to a new Colliers report. It is the first NYC submarket to recover all occupancy losses caused by the pandemic.
More than 10M SF of leases were signed throughout the borough, so Manhattan’s office market is on pace for its most active year since 2000.
The tightening market has allowed owners of class-A buildings across the borough to push asking rents to an all-time high of $85.45 per SF, according to Colliers.
“Manhattan’s office market recovery continued apace through the summer and into early fall,” Colliers Executive Director of Research and Business Development Franklin Wallach said in a statement.
Midtown’s availability rate dwindled to 11.9%, while the average asking rent is now $85.08 per SF, up 5.4% year-over-year – the fastest annual Q3 jump since 2014. Proskauer Rose signed the biggest deal of the quarter at 11 Times Square with its 478K SF expansion.
“Rents are increasing,” said SL Green Leasing Director Steven Durels at the Bank of America Global CEO Real Estate Conference last month. “They’re not limited to just the high end of the market.”
It was also a record-breaking time in the Midtown South tech hub. Powered by Anthropic’s bumper 466K SF full-building leasing at 330 Hudson St., the 4.8M SF of leasing activity was the most for the third quarter on record, according to Colliers.
The artificial intelligence company is taking nearly 1.1M SF of Manhattan office space, continuing its expansion after taking 800K SF in Q2 and 790K SF in all of 2025.
Downtown, by contrast, lost momentum last quarter, with 850K SF of leases signed – 21.7% below the monthly average over the past five years.
But it didn’t slow Manhattan’s momentum: The overall availability rate shrank 2.4% between July and October, ending the quarter at 12.4%, according to brokerage data.
The scramble for space has put city office landlords firmly in the driver’s seat, with strong tenant demand and buildings being converted into apartments halting increases in tenant concessions.
“As we enter the final quarter of the year, the market begins a new chapter after achieving several critical recovery milestones,” Wallach said.