Manhattan Office On Track for Possible Record Leasing Year: Report

The Manhattan office market is on track to not only meet 2019’s full-year leasing total in square footage, but to also possibly match 2014’s benchmark leasing figures, according to a report from Savills.

Manhattan recorded 10.6 million square feet of office space leased in the third quarter, bringing the total for 2025 so far to 31.7 million square feet. If that pace holds, it  means office leasing in the borough is heading toward pre-pandemic levels, potentially matching 2019’s 41.5 million square feet. 

Savills research director Matt Schreck believes 2025 leasing has the potential to not just exceed 2019’s numbers, but also beat the record set in 2014 when the office market hit a 16-year high as total Manhattan leasing reached 43.8 million square feet.

​​”Manhattan’s office market is continuing to build momentum, with 31.7 million square feet leased to date this year and fundamentals pointing to a strong finish,” Schreck said in a statement. “Q4 traditionally delivers some of the year’s most robust activity, and with Midtown and Midtown South both showing tightening availability and accelerating demand — especially in top-tier assets — there’s a credible path for 2025 leasing to exceed the 41.5 million square feet recorded in 2019, and achieve the strongest year of demand since 2014’s 43.8 million square feet leased.”

The only thing that could get in the way of those expectations, according to Savills, is the slowing job market.

Average asking rent across all classes was down 0.6 percent to $75.44 per square foot compared to $75.91 in the second quarter, but the price of Class A space increased from $85.49 to $86.35 per square foot.

Midtown Class A space saw the highest price increase, with a 3.1 percent rise to $93.83 per square foot quarter-over-quarter, according to Savills.

Quarter-over-quarter availability dropped 100 basis points to 16.2 percent across the entire borough, a figure matched in Midtown, where availability also declined 100 basis points, to 13.8 percent. Availability rates measure office space that is vacant or soon to be vacant.

Midtown South and Downtown availability indicated a slower pace of leasing, with the former dropping below 20 percent for the first time since 2022, according to Savills, as inventory in those neighborhoods converts to residential at a higher rate than the rest of Manhattan.

Inventory across Manhattan overall dropped from 466.1 million square feet in the second quarter of 2025 to 449.4 million square feet in the third quarter.

The tech, advertising, media, information and legal industries took the majority of space in the third quarter.

The deals that moved the ticker the most were Deloitte’s 807,000-square-foot lease at 70 Hudson Yards, Guggenheim Partners’ 356,658-square foot renewal and expansion at 330 Madison Avenue, and Salesforce’s renewal and expansion to 313,591 square feet at 1095 Avenue of the Americas.

Mark Hallum can be reached at mhallum@commercialobserver.com.