Manhattan Office Leasing Skyrockets to 3.6M SF in January: Report

It seems like predictions of a strong office market in 2025 are coming true, as Manhattan’s total leasing volume in January was far ahead of the decade’s monthly average, according to a report from Colliers (CIGI).

Manhattan saw 3.6 million square feet of office space leased in January, a 24.4 percent increase from the 2.9 million square feet leased in December and a 56 percent jump compared to the same time last year, Colliers found.

January’s leasing numbers are also more than a third above Manhattan’s 10-year average monthly leasing volume of 2.67 million square feet, Franklin Wallach, head of research at Colliers, told Commercial Observer.

“This is certainly a sign that the robust demand we saw last year has continued in the opening innings of 2025,” Wallach told CO. “And the strong activity was complemented by us continuing to see blocks of space come off the market.”

While Wallach said January’s success may be due to a spillover from major leases signed during the fourth quarter of 2024, January saw several big leases of its own — and mostly in Midtown.

Fashion company KnitWell Group expanded to 246,000 square feet at BXP’s 7 Times Square, the Federal Deposit Insurance Corporation moved to 147,543 square feet 1166 Avenue of the Americas and tech giant IBM expanded by 92,663 square feet at SL Green Realty’s One Madison Avenue.

Meanwhile, Manhattan’s availability rate decreased to 16.2 percent in January, down from roughly 18 percent during the same period last year and the lowest since 2021, according to Colliers.

Midtown specifically ended January with a 14.9 percent availability rate, representing the first time since November 2020 that the rate fell below 15 percent in that neighborhood, Wallach said.

“After a momentous 2024 — during which Midtown’s demand was the highest since 2018 — its popularity continued in the new year as the top three largest Manhattan transactions all occurred in this market,” Wallach said. “Not only that, Midtown accounted for more than 50 percent of the total January leasing velocity, successfully outpacing its 45 percent share of the total inventory.”

In addition, the overall asking rent in Manhattan decreased to $73.28 per square foot in January, likely due to “significant blocks” of above-average priced space coming off the market, Wallach said.

The January numbers show Manhattan kicking off 2025 on a high note after the borough’s office leasing market ended 2024 with its heftiest leasing activity since 2019. Last year, Manhattan saw 33.3 million square feet of deals.

And while it remains to be seen how the rest of 2025 will play out, experts previously told CO they expect it to continue to be strong thanks to more companies implementing stricter return-to-office mandates and trying to secure higher-quality office space before they completely fill up.

Isabelle Durso can be reached at idurso@commercialobserver.com.