The headlines don’t lie, but they may not tell the whole story, either. 

Last year’s flashiest Manhattan office leases each accounted for hundreds of thousands of square feet, from Jane Street Capital’s 1 million-square-foot deal at 250 Vesey Street to Deloitte’s 800,000-square-foot home at 70 Hudson Yards. Those newsworthy mic drops have attracted the attention of brokers, landlords and media — Commercial Observer included — but look between the lines, and between office floors, and it’s the aggregate of smaller, under-the-radar deals that have driven leasing activity and transactions in similar, if not greater, force. 

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These leases range in size, depending on the tenant and the incremental space that’s available in any given building. The floor plate could therefore be as small as 10,000 or 15,000 square feet, or as large as a single floor or a 40,000-square-foot deal, said Mary Ann Tighe, CEO of CBRE’s New York tri-state region.

Regardless of the specifics, an individual lease between 5,000 and 99,000 square feet typically receives less attention than a bigger deal, and, on its own, is less likely to move the market. Cumulatively, however, these smaller leases have steadily contributed to the strength of New York’s office sector, driving business in more ways than one. 

“As much as we read about in the headlines the quarter-million-square-foot, half-a-million-square-foot, million-square-foot deals, one of the few consistencies throughout the 400-year history of the Manhattan office market is the fact that these smaller deals make up the bulk of the number of transactions,” said Frank Wallach, executive managing director of research and business development at brokerage Colliers. “They are by no means inconsequential. They are absolutely the foundation of the market.”

Smaller leases, which Wallach defines as those between 5,000 and 25,000 square feet, drove approximately 78 percent of office deals in Manhattan in the fourth quarter of 2025, he said. Meanwhile, midsize leases between 25,000 and 99,999 square feet — still small relative to the 100,000-square-foot-plus deals — were responsible for about 18 percent of the quarter’s overall number of transactions. The biggest deals filled in the gaps at about 4 percent of all deals, said Wallach. 

It’s not just the sheer number of transactions where smaller deals have come to shine. Rather, these low-key leases, as the sum of their parts, account for the majority of Manhattan’s leasing volume. According to Colliers data for 2025’s third quarter, about 40 percent of the borough’s leasing volume was driven by tenants taking less than 25,000 square feet each, while the middle-tier leases accounted for another 30 percent of leasing volume. Adding up to a majority 70 percent, these leases of less than 100,000 square feet therefore overrode the volume of even the largest, flashiest deals. 

According to Cushman & Wakefield data, new and renewal deals for more than 100,000 square feet accounted for only 34 percent of Manhattan’s 2025 square footage. Entirely new deals — not including renewals — for that same size bracket accounted for around 8 million square feet — 26.9 percent of Manhattan’s total square footage leased. 

As these headline-making deals represented only a fraction of the total marketplace, the smaller deals made up for the remaining footprint. In 2025 at large, deals between between 5,000 and 14,999 square feet equated to 9.77 million square feet, according to Colliers, accounting for 23.3 percent of Manhattan’s leasing volume. That was an increase from the 7.93 million square feet the same size cohort totaled in 2024, per Colliers. For comparison, deals that exceeded 100,000 square feet in 2025 amounted to a little more than 14 million square feet, about 33.7 percent of overall velocity. 

The ratio of activity between lease sizes last year remained consistent with that of 2024, per Colliers data. But, while the prevalence of smaller-scale leases isn’t necessarily new, incremental expansions are enabling the market’s current,organic absorption of newly available space with an unusual force. 

“There’s been a consistent flow of middle-market lease expansions that really have supported the overall marketplace,” said Paul Glickman, a JLL vice chairman. “[These leases] have definitely helped drive this marketplace to where it was in 2025 from a leasing velocity standpoint.”

This vitality has arisen in part from the unexpected increase in return to office, as well as the growth and consolidation of businesses such as financial companies and law firms, said Tighe. It translates to one trend: Companies simply need more room.

“The vast majority of transactions include a substantial piece of expansion space,” said Michael Movshovich, vice chair and New York lead of the alternative investment advisory group in Cushman & Wakefield’s Midtown office. “So, whether it’s a lease expiring and there’s a relocation, or it’s an expansion-driven relocation, you are seeing statistically in the data a significant percentage of each transaction is comprised of incremental square footage, relative to whatever the space they’re coming from.”

That adds up, of course. 

“In 2025, pure expansion in Manhattan has accounted for 3.9 million square feet of transactions,” said Tighe. “That’s an enormous growth over the previous year.”

Finance and law firms comprised about 60 percent of that 3.9 million square feet in Manhattan, said Tighe. Since 2023, law firms inked more than 11 million square feet, per CBRE data, and resulted in a 3.7 million-square-foot annual leasing average. From 2015 to 2019, that average was significantly lower at 2.6 million square feet per year. 

Firms are expanding not only within their existing addresses but also into new ones. “We’re now seeing a phenomenon we haven’t seen in a while,” said Tighe, “where we’re seeing major firms be in two or three buildings because they can’t grow in their own.”

Leases in 2025 demonstrated incremental expansions of all kinds. Last year, Sadis & Goldberg grew by 6,000 square feet in 551 Fifth Avenue; Foster Garvey relocated to 11,445 square feet at One Seaport Plaza; Bramshill Investments doubled to 7,145 square feet in a relocation to 45 East 53rd Street; and Haven Capital added a 5,163-square-foot office at 825 Third Avenue.

This trend persists with the middle-level deals. In December, Cerity Partners expanded to 49,000 square feet at 99 Park Avenue, while, a year prior in that same building, Metropolitan Commercial Blank grew from 55,200 square feet to 81,979. At 51 Astor Place, Intuit expanded by 77,000 square feet and Perceptive Advisors added 7,000 square feet.

“The dynamic that ties into this is the diversity of the growth across different tenant profiles,” said JLL’s Glickman, pinpointing sectors like technology and financial services.

It can also include commercial real estate itself. Take CBRE’s 180,000-square-foot lease at 200 Park Avenue. Tighe noted the prevalence of growing tenants within the 58-story, nearly fully leased skyscraper. 

“We grew and needed incremental space in the building,” she said. In 2020, CBRE expanded its lease by 44,612 square feet and, in 2024, announced a lease extension, as well as plans to take additional space in the lobby. “But the same is true for our law firm space in the building, and we also became a location that financial services firms wanted for their incremental growth.”

Meaning, 200 Park attracts tenants of neighboring buildings, who may not be able to expand within their current homes farther down Park Avenue or on a nearby street. The infilling of leftover space may correlate to the low availability numbers in Class A buildings like 200 Park — a building might be 90 percent leased, anchored by large tenants, only to reach that 100 percent occupancy as tenants expand into the residual square footage. 

No matter how small an increment, deals for leftover space add up quickly and, coupled with the hot-shot deals making the headlines, have contributed to the drop in New York’s office availability rate, a key measure of vacant and soon-to-be-vacant space. According to Avison Young’s 2025 fourth-quarter report, the overall availability for Manhattan office space fell to 15 percent — a decrease of 3 percentage points from 2024’s last quarter and the lowest rate since 2020.  

In 2026, reduced vacancy in highly amenitized office towers could become all the more pronounced, as little or no new inventory is on New York City’s docket. 

“We’re not going to see significant new product added to the market for another four to five years,” said Tighe, who predicted a rise in buildings with fewer bells and whistles, as well as those in secondary locations. Enter: Increased potential for Class B and even Class C offices, both of which, according to CoStar data previously reported by CO, are likely to attract more tenants in 2026.  

However, “there’s only so much of a tradeoff that [tenants will] accept,” said C&W’s Movshovich, who highlighted the likelihood of more subtle switches than drastic asset class overhauls, such as moving from a premier Park Avenue building to a lower-cost one on the same or similar street.

If tenants don’t find suitable space for their expansions, creative interior solutions may be their best bet, at least in the short term. Efforts to accommodate growth may include adding more seats or workstations to an office, changing up furniture arrangements, and opening up space within the existing lease, said Movschovich. 

“Because of the supply crunch, it’s harder to accomplish expansion in the building,” he said, pointing to the inconvenience of expanding into fragmented space a few floors above or below a firm’s current office. “The importance of space as kind of a strategic business component of any company has gone up a lot.  … You’re less willing to do something sub-optimal.”

Yet, even as buildings fill up and the market ebbs and flows with every passing year, the interplay between small and large leases — as well as those in between — has shown no sign of changing dynamics. 

“We had about 25 percent more leasing volume year-over-year [from 2024 to 2025],” said Wallach. “Despite that, the relative share of the largest and smallest deals was relatively stable. … That just sort of goes to show the strength of this paradigm that’s been in place for almost the length of the Manhattan office market existing.”

Anna Staropoli can be reached at astaropoli@commercialobserver.com.