Manhattan Class A Buildings Are Dominating Office Sales in 2025

Manhattan’s Class A and trophy office assets had a strong start to the year, according to preliminary sales and leasing data from Ariel Property Group shared exclusively with Commercial Observer.

Its Class B and C counterparts, not so much. Post-COVID-19 headwinds continue to plague this segment of the office market as tenant demand shifts. 

Class A and trophy office buildings accounted for 74 percent of the $3.2 billion in office sales for the first half of the year and 82.5 percent of Manhattan leasing activity, the Ariel data showed, with the amenities offered at these buildings playing a large part in their demand. Some of these boutique offices offer hotel-quality extras such as sport simulators, meditation rooms, libraries and cafes. 

“These assets continue to attract high-credit tenants across finance, law, tech, AI and Fortune 500 firms, driven by hospitality-level amenities, wellness-focused design, and strong transit access,” the Ariel report noted. 

On the flip side, Class B and C office buildings — which are typically more functional than fancy — accounted for 83 percent of sales for the first half of the year, but just 26 percent of the total dollar volume, which highlights frequent trading at lower prices.

Declining rents, elevated vacancy and oversupply have spurred building owners to invest in upgrades or residential conversions that have been supported by the city’s rezoning efforts and tax incentive programs.

“The first half of 2025 marked a turning point. Capital is flowing into both trophy offices and well-located conversion opportunities,” Shimon Shkury, president and founder of Ariel Property Advisors, told CO via email. “We’ve seen this in our own transactions — more lenders, more equity, and more conviction — driven by strong tenant demand, zoning reform, and a renewed public-private push to reshape New York City’s office and housing market.”

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