Despite a slight decline in new deals compared to the previous quarter, Manhattan's office market recorded a robust third quarter of 2026. Leasing volume exceeded both the five-year and ten-year quarterly averages, according to the latest research from Colliers. In total, 10.06 million square feet of office space was leased in Manhattan in July, August, and September, primarily driven by large new deals and tenant expansions.
The third-quarter leasing volume was 16.2 percent above the five-year quarterly average of 8.66 million square feet and 19.2 percent above the ten-year average of 8.44 million square feet. Nevertheless, the leasing volume for this period was 8.7 percent lower than the 11.02 million square feet leased in the second quarter of 2026.
Historically low availability and rising rents
The third quarter marked several milestones in Manhattan's office leasing market, including the first time since 2002 that leasing volume exceeded 10 million square feet for four consecutive quarters. It was also the most active third quarter ever recorded for offices in Midtown South. Leasing volume in Midtown South reached 4.75 million square feet in the third quarter, bolstered by large transactions from Anthropic, Havas Health, and Snapchat parent company Snap.
According to Colliers, the third quarter also saw the lowest available office space since August 2020, at 27.72 million square feet. This corresponds to the pre-pandemic level of March 2020, which stood at 27.71 million square feet. The availability rate for offices in Manhattan was 12.4 percent in the third quarter, marking the tenth consecutive quarter of tightening supply – the longest period since 2007, the company stated. Average asking rents for offices in Manhattan also rose to their highest level since July 2020, reaching $85.08 per square foot in the third quarter, compared to $78.03 per square foot in the second quarter.
Significant leases and market recovery
Franklin Wallach, Executive Managing Director for Research and Business Development at Colliers in New York, commented on the market development. He said that the recovery of the Manhattan office market continued rapidly throughout the summer and into the early autumn. He added that as the market enters the final quarter of the year, a new chapter is beginning after several crucial recovery milestones were achieved in the third quarter. Specifically, pricing for Class A space reached a new peak, Midtown was the first major Manhattan market to return to its pre-pandemic availability level, and Midtown South recorded its most active third quarter ever.
- —Proskauer Rose: Expansion to 478,000 square feet at 11 Times Square.
- —Anthropic: 465,630 square feet at 330 Hudson Street.
- —Havas Health: Expansion by 254,118 square feet at 200 Madison Avenue.
- —NBC Universal: 244,185 square feet at 1221 Avenue of the Americas.
- —Morgan, Lewis & Bockius: 210,000 square feet at 1251 Avenue of the Americas.
