Return to Office Really Took in 2024 — Here’s Proof

Make no mistake: Office was back in 2024 — or as back as it’s ever been since experiencing its near death five years ago during COVID-19. And nowhere has the recovery been more obvious than in Manhattan. 

Manhattan’s office leasing activity hit 33.3 million square feet by the end of the fourth quarter in 2024, representing the highest full-year demand since 2019, according to Colliers.

The nation’s premier office market opened 2025 with its strongest office leasing activity in over a decade, per CBRE. By April, Manhattan office leasing volume was 25.4 percent above the 10-year monthly average of 2.7 million square feet, and the overall availability rate fell to 15.7 percent, compared to 18 percent in April 2024, Colliers noted. 

And it’s not just the new, pristine office towers that are benefiting from the Big Apple’s return-to-office phenomenon. 

Commercial Observer reported last month that Class B offices are now facing a space crunch. Colliers found that Class B leasing volume in the first quarter of 2025 came out 25 percent ahead of its 10-year quarterly average of 1.81 million square feet, and that Class B leasing in Manhattan exceeded 2 million square feet in the third and fourth quarters of 2024 — the first time the B market experienced consecutive quarters of positive volume since March 2020. 

And then there were the sales. While U.S. office building sales dropped 11 percent in 2024, the biggest markets performed well: Manhattan office sales jumped from $1.8 billion in 2023 to $4.9 billion in 2024, the highest amount in any U.S. city last year. Washington, D.C., recorded $3.9 billion in office sales — good for second in the nation — while Los Angeles recorded $3.2 billion, and Boston $2.4 billion.

Landmark investment sales this past year included J.P. Morgan Chase and Hines buying AEW Capital’s 250 Park Avenue for $310 million and SL Green selling an 11 percent stake in One Vanderbilt to Mori Building Company in a deal that valued the tower at $4.7 billion. 

It wasn’t all a narrative of recovery, of course. Carlo Bellini’s 99c bought 180 Maiden Lane from Clarion Partners and MHP Real Estate for $297 million — a nearly $110 million loss. 

Perhaps no deals reinforced the renewed faith the capital markets have in office than two gargantuan CMBS deals from Tishman Speyer in Manhattan. The firm refinanced Rockefeller Center, the famed Midtown office and retail complex, for $3.5 billion in October, and then shortly after The Spiral, a 66-story office tower in Hudson Yards, for $3 billion. 

Brian Pascus can be reached at bpascus@commercialobserver.com.