$300 a Square Foot for a Manhattan Office Is Losing Its Shock Value

The path to $300-per-square-foot office taking rents in Manhattan began with a glimpse toward the future.

In 2016, Mary Ann Tighe, CEO of the New York tri-state region for CBRE, was negotiating with investment giant Citadel on behalf of L&L Holding Company, owner of 425 Park Avenue, which was then under construction.

According to Tighe, after the lease for Citadel’s 200,000 square feet in the building was negotiated for considerably less than $300 per square foot, Citadel head Ken Griffin informed Tighe and L&L that as the building’s anchor tenant, he wanted the option to occupy the top floor.

As occupancy was still years away, Tighe and L&L had to consult their crystal balls, metaphorically speaking, to determine the correct amount for the top-floor lease.

“[L&L head] David Levinson and I discussed it,” said Tighe. “I said, ‘Here’s the issue. Whatever number we set the top floor for, everything underneath it is discounted off that number. The building will not be complete for another two years or so, and whatever number we’re setting today becomes the baseline for discounting below it.’”

Tighe therefore recommended that they ask for a number they believed would be “the ultimate number in the market by the time this building is completed.” As $300 per square foot had yet to be achieved, that was the number Tighe recommended they ask for from Citadel.

Tighe said that Levinson asked how they would justify that number without a precedent.

“Ken Griffin is a man who’s familiar with pricing and auctions,” said Tighe. “There’s an auction price where you’re competing in the market, or there’s a ‘buy it now’ price where you take it off market and say, ‘If you want it without us going to market, this is the number we need.’ If you consider 11,000 square feet at [the top floor] and roll it into the 230,000 square feet [throughout the rest of the building], which were nowhere near $300 a foot, the weighted average was relatively small. That’s how we achieved the first $300 rent, because Ken Griffin said, ‘I get it. I understand. I want it now. I’m taking it off the market.’”

Tighe was well ahead of her time in breaking the $300 barrier, as 10 years later, the number of companies paying over $300 per square foot in Manhattan can still be counted on one hand.

That said, three of those leases have been signed since the start of 2025, according to CBRE. 

And with the April 2026 news that the 1.6 million-square-foot 9 West 57th Street secured a lease for the record price of $340 per square foot — a 10-year lease to Gonzalo Hevia Baillères, founder of AI logistics company Lok, for 5,063 square feet on the building’s 50th floor that was widely misreported initially as $327.50 per square foot — the question arises of whether $300 per square foot is shifting from a shocking, record-setting event to something akin to a new normal for the market’s top office product.

Michael Hershman, CEO of the building’s owner, the Soloviev Group, said that the company recently spent close to $50 million on an amenity floor, including a restaurant and lounge, a boardroom overlooking Central Park and a state-of-the-art health center. The building also has an art gallery that displays a rotating collection of works by artists such as Alberto Giacometti, Henri Matisse, Joan Miró and Roy Lichtenstein, to name just a few. 

All of this, combined with the building’s iconic reputation; groundbreaking architectural design; Central Park views; tenants including Apollo Global Management, Chanel, Loews Corporation and the Qatar Investment Authority, plus its location on Billionaires’ Row and the current positioning of the market made the building a natural choice to be first to achieve a taking rent of $340 per square foot.   

“When it was first designed back in the early 1970s, it was one of the first curved buildings in Manhattan, and the architectural community said it was one of the ugliest buildings ever built,” said Hershman. “Ten years later, it was winning awards for architectural design, which shows you the vision way back in 1970.”

According to Hershman, market forces, including the stature of the building’s tenants, made the $340 figure a natural for the space, and said the tenant offered no pushback to the amount.

“Success breeds success,” said Hershman. “[Companies] want to be in a building where there are other like companies in the financial industry who are well known, with good reputations for integrity and transparency. You’ll often find them on our amenity floor, having coffee or a cocktail and talking business. It’s a wonderful way for them to network.”

In addition to 9 West 57th Street and 425 Park Avenue, $300-per-square-foot taking rents or higher can also be found at SL Green’s One Vanderbilt, with RFR’s Seagram Building not far behind.

Given how quickly rents have risen over the past two decades — global financial crises and pandemics notwithstanding — and then accounting for the current growing demand for the ultimate in trophy office space, it’s worth considering how we got here in order to determine the timing and amount of the next major threshold.

According to data from CBRE going back to 2007, the $100 to $149 range has been, and remains, the standard for office space in Manhattan. 

In 2007, the borough saw 90 deals in that range, alongside 16 deals that edged up into the $150 to $199 range, which then represented the top of the market. The following year — right before the economy came tumbling down — saw 10 additional deals in the higher range, with two deals bursting through the $200-per-square-foot barrier.

Placing the Global Financial Crisis (GFC) nightmare of the next five years aside, 2014 was the first year post-GFC to see new deals break into that range. 

But apart from two more in 2016, New York City didn’t come close to that amount again until 2021 — just five years ago — when, on top of 25 deals in the $150 to $199 range, five deals signed for over $200 per square foot.

Even with the ongoing uncertainty about the effect of work from home and hybrid work on the office market, 2022 became the strongest year for office deals since before 2007, with 15 deals in the $150 to $199 range, 15 more from $200 and $299, and the first New York deal over $300 per square foot when Citadel took occupancy of the top floor at 425 Park Avenue, according to Tighe.

Since then, 2025 far eclipsed 2022 in $100-plus deals, including 38 from $150 to $199, 21 from $200 to $299, and one more — the first since 2022 — over $300. 2026 is currently on a strong pace, including, in a first for New York City, two deals (so far) over $300 a square foot in one year, according to CBRE.

While its status as a rarity is dissipating, the $300-per-square-foot mark will clearly represent the best of the best for some time.

“Leases surpassing $300 per square foot are beginning to establish the upper limit of Manhattan’s office market, but they remain highly concentrated at the very top in both building quality and location. These are outliers, not the baseline,” Victor Rodriguez, senior director of market analytics for CoStar Group, said in an email to Commercial Observer, referring to pricier lease terms being generally reserved for a building’s upper floors. 

A higher perch is just one potentially limiting circumstance surrounding the achievement of $300-plus rents.

Tighe notes that rents at the highest level are currently being achieved only for small spaces.

“What we’re seeing with $300 and above is 5,000-square-foot units, which means if you are taking a small space like that, the per-square-foot rent is almost irrelevant,” said Tighe. “You’re looking at what the annual rent is, and that’s a very different thing than entering an environment where a sizable tenant is taking a space that’s $200-plus a square foot.”

Still, falling trophy supply has helped make $300-plus rents more achievable. Rodriguez said that over the past four years, trophy office availability in Manhattan has dropped from 18.4 percent to 8.3 percent. In the Plaza District, that number is just 3.3 percent.

With supply dropping and price pressure increasing, every threshold reached and maintained serves as a reset of sorts, teeing up expectations for the next record to fall.

“There are definitely discussions for several new construction buildings that are well above $300 per square foot,” said Michael Movshovich, a vice chairman at Cushman & Wakefield. “I think it is likely that there will be at least one transaction around $350 per square foot, or potentially a bit above it, before the end of the year.” 

Movshovich notes that in terms of new construction, there are only four buildings — three in Midtown and one in Hudson Yards — currently slated to deliver before 2030, and a good amount of space in those buildings is already committed.

“That’s only a few million square feet delivering at that quality over the next three or four years,” said Movshovich. “So the supply is very constrained, but you also have substantial demand driving everything up. You’ve got financial institutions, law firms, even some technology and AI companies circling that, so there is a substantial increase in the willingness to pay.”

All of which indicates that as rare as the $300-plus trophy office rent is today, a reset that stuns the market could conceivably occur way sooner than anticipated.

Hershman notes that just as Soloviev looked at comparable buildings like One Vanderbilt to set its new price, the $340 per square feet the owner secured will likely influence new trophy leases to shoot for even higher amounts in the not-too-distant future.

“The market is extremely tight for commercial buildings at the AAA level. There’s simply not enough space,” said Hershman. “So the rent is going to be dictated in part by not only location or amenities, but also by availability. I think $350 or $400 a square foot are both within reach, particularly if we continue to see a paucity of high-level commercial office buildings in the city.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.