Manhattan Office Leasing Activity Has Strongest Yearly Start in Over a Decade: CBRE

“We had two very strong months here in 2025 and we’ve been on a pretty good run over the past several months,” Michael Slattery, Tri-state research director at CBRE, said. “It seems like the market overall has been really inching upwards and took some pretty big leaps in January and February.”

And, even better, the activity isn’t driven solely by tenants staying put but “new folks’ relocation, new tenants coming into the market,” which “is a real indicator for health,” Slattery added.

Driving this positive leasing activity was the robust strength of certain industries — notably legal and finance — which has resulted in some tightening in the market, Slattery said. 

“It’s helpful because if we go back to 2023, deals were taking an extremely long time,” he said. “There wasn’t as much pressure, because there was enough supply out there. But with that tightening, folks are now competing for space, which means quick decisions, which means more leasing in a shorter time period.”

And, even with just two months in the bag for 2025, Manhattan has seen some headline-grabbing deals. That includes trading firm Jane Street Capital’s nearly 1 million-square-foot expansion and renewal at 250 Vesey Street, Newmark (NMRK) keeping its space at 125 Park Avenue and growing to 184,239 square feet, and Mizuho Financial Group signing on for 151,409 square feet at 1285 Avenue of the Americas.

Plus, more is reportedly on the way with Universal Music Group nearing a deal to take 300,000 square feet at Vornado Realty Trust’s Penn 2.

Midtown saw the most leasing activity in February compared to other areas of Manhattan, according to the CBRE data. Leasing activity totaled 1.32 million square feet in Midtown, above the five-year monthly average of 1.09 million square feet. 

“Midtown is the largest market, and when you look at the overall leasing, Midtown has made up the lion’s share,” Slattery said. “The reason that Midtown is so attractive is it has this very strong mix of high-quality space, and it is also transit rich. You’ve got Grand Central, you’ve got Penn Station. And when you’re talking about the finance and legal sectors, being a walk from Grand Central is extremely appealing.” 

Although Midtown was the “hottest” of the three major markets in Manhattan, Slattery said the data showed more balance in the leasing activity across the borough, as Midtown South was near its long-term average and the traditionally quiet market that is Downtown also saw more activity. 

In Midtown South there were 337,000 square feet leased, which matched the five-year monthly average. Downtown — which has lagged behind the recovery seen in other neighborhoods — saw a total of 864,000 square feet of leasing activity last month, well above the five-year monthly average of 223,000 square feet.

While the recovery is happening all across Manhattan, Slattery said that the balance of power in Midtown has started to shift toward landlords as the Class A office drought makes it tougher for tenants to find high-quality office space.

“What’s gotten my attention is just how tight Midtown is becoming,” he said. “Overall availability, when you really peel back that number to focus on Midtown’s core properties that are higher quality, it’s no longer a tenant’s market. And so that’s something to me that is going to paint the picture for this year.”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.