Manhattan Office Leasing Jumped 17% in May: Colliers

For Manhattan’s office leasing market, it’s the climb. 

Office leasing activity in the borough jumped 17.3 percent month-over-month in May to 4.24 million square feet leased, according to the latest monthly snapshot report from Colliers. May’s office leasing velocity also exceeded the 10-year monthly average of 2.79 million square feet by more than 50 percent. 

“The May numbers definitely indicates a continued trend of Manhattan’s recovery, which has been ongoing now for two-plus years,” Franklin Wallach, executive managing director of research and business development for Colliers in New York, told Commercial Observer. “Healthy is definitely the word that comes to mind.” 

Year-to-date, Manhattan’s leasing activity has hit 19.63 million square feet, nearly a 10 percent rise from the roughly 17.91 million square feet recorded at the same time last year. If the demand for Class A Manhattan office properties continues at its current pace, leasing volume in the borough in 2026 could reach its highest level since 2000, according to Colliers. 

“We look at the numbers, usually around the halfway point of the year, and we simply base it on the mathematics. It is not a prediction of what will 100 percent happen for the rest of the year,” Wallach said. “There’s so much that can change month to month in the complex 522 million-square-foot Manhattan office market … [but] if demand continues at the same pace it’s been going, we would have more than 47 million square feet of leasing volume, which would be the highest single year of leasing since 2000.” 

The average monthly asking rent for office space grew by 0.3 percent to $77.76 per square foot in May, Colliers found, while the availability rate decreased by 0.2 percent to 13.2 percent during the month. Meanwhile, total available supply fell to 69.18 million square feet in May, the lowest since October 2020 and 29.4 percent below the post-pandemic peak of 98.05 million square feet in February 2024. 

Three of the largest Manhattan office leases recorded in May included media company Versant expanding to 249,054 square feet at 229 West 43rd Street, law firm Baker McKenzie growing to 121,833 square feet at 10 Bryant Park, and HDR Engineering taking 74,500 square feet in a  relocation to 7 Penn Plaza. 

“The narrative that has continued to always be part of the Manhattan office market, is that the bulk of demand has always been driven by the tenants under 25,000 square feet,” Wallach said. “That remains true based on a number of transactions, but a few deals can always move the needle.”  

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