N
ew York City’s office market is thriving, with leasing activity reaching levels unseen in years. Vacancy fell to 14.8 %—the lowest in five years—while trophy‑class buildings sit at just 7.6 % vacancy, according to JLL’s latest monthly snapshot. Third‑quarter leasing totaled 6 million sq ft, pushing the year‑to‑date figure to 21.7 million sq ft, a 7 % year‑over‑year rise.
Rent trends mirror the strong demand. Midtown’s average direct‑lease rate climbed 2 % in Q3 to $85.44 per sq ft, and trophy locations saw a 3.1 % increase to $132.24 per sq ft. CBRE echoes this sentiment, noting that availability and vacancy are at their lowest since 2021. Sublease supply, which had been a drag post‑pandemic, has dropped by nearly half since 2023; the current pool is 12 million sq ft, only 1.5 million more than year‑end 2019.
Some sublease space has been absorbed, such as Bank of New York’s expansion into former Condé Nast floors at One World Trade Center, while other tenants have scaled back their intended space cuts. Despite pundits claiming that Manhattan offices remain half empty because of work‑from‑home policies, recent large leases contradict that narrative: Deloitte at 70 Hudson Yards, NYU at 770 Broadway, Amazon at 10 Bryant Park, and Guggenheim’s renewal and expansion at 330 Madison Ave all signal robust demand.
JLL Vice Chairman Joe Messina notes that these long‑term commitments underscore confidence in Manhattan as a global business hub. “Not all space will be occupied five days a week, but these major deals show firms want high‑end space to bring people together and sustain operations at scale,” he said.
The investment‑sale market, dormant after the pandemic, revived in August with the $1.08 billion sale of 590 Madison Ave. Confidence is further reflected in Vornado‑Rudin‑Ken Griffin’s plan for a new skyscraper at 350 Park Ave and BXP’s decision to build a tower at 343 Madison Ave before tenants are signed.
Finally, Placer.ai data reveal that Manhattan office occupancy in July 2023 exceeded that of July 2019, indicating a rebound in on‑site work.
