There was a time not that long ago when Manhattan was awash in towers with multiple empty floors in need of a tenant. Those days are gone.
Now, companies with large office footprints are starting their renewal or relocation decisions five or more years before their leases expire to ensure they have some top-tier options to choose from.
“This is probably the frothiest time of lack of supply,” JLL Vice Chairman Mitch Konsker said. “I would probably say, in my 43-year career, it’s happened two or three times.”
Of the 35.1M SF of NYC office leases tracked by JLL in 2025, 43.8% were signed by companies taking 100K SF or more. Big-block leasing was an even greater share of the market when there were fewer deals overall in 2024, at 53.8%, according to JLL data provided to Bisnow.
Much of that demand was concentrated in Manhattan’s trophy buildings, which ended the year with a 3.7% availability rate, according to Newmark.
“There are no 100K SF blocks in what’s considered the best of the best part of the market,” SL Green Director of Leasing Steven Durels said last month on an earnings call.
The dynamic sits in stark contrast to the rest of the country’s office markets, where tenants by and large have the upper hand. Vacancy was just shy of 15% in Manhattan at the end of 2025, according to Newmark, the lowest of any major market. The national vacancy rate was 20.4%, and it was north of 25% in Chicago, Los Angeles and San Francisco.
The dearth of high-quality Manhattan office space has led to tenants signing substantial renewals and expansions in Manhattan office towers in recent months: Eight of the 10 largest leases signed in the fourth quarter fit into those categories, according to Savills.
Law, finance, banking and tech tenants — like Bloomberg, which signed a 498K SF expansion at Global Holdings’ 120 Park Ave. last year, five years ahead of its expiration — are driving most of the demand for best-in-class space, brokers said.
Guggenheim Partners locked down a 360K SF renewal and expansion at 330 Madison Ave. last year, a full three years before the 15-year lease it signed in 2013 was set to expire.
“The tenants that are in growth mode, and law firms in particular, right now are one of the drivers behind what is making the engine go in New York City,” Cushman & Wakefield Chairman Bruce Mosler said.
In fact, space in best-in-class offices for those tenants’ requirements is so tight that landlords are shuffling tenants around to create larger blocks, Mosler said. For high-profile owners of some of the city’s trophy and Class-A space, limited availability presents a new opportunity.
Vornado is working to create a 380K SF block at its Penn 1 tower, which is 89% leased, up to a 350K SF block at Penn 2, and as much as 400K SF at 1290 Sixth Ave. because of the “shortage” of large contiguous spaces, CEO Steve Roth said during his company’s earnings call on Feb. 10.
“We are making available to the marketplace what our clients need and want,” he said.
Courtesy of Volley Studio
A rendering of BXP’s 343 Madison Ave., where the developer has already landed an anchor tenant despite the property’s 2029 delivery date.
The competition for dwindling supply at the top of the market has convinced the city’s largest commercial landlords to start building new skyscrapers, confident that tenants will pay $200 per SF or more to ensure their spot.
Investment and insurance firm Starr signed for 275K SF at BXP’s planned 343 Madison Ave. tower last month, even though the developer won’t finish building the property until 2029 at the earliest.
Deloitte last year agreed to an 800K SF lease at 70 Hudson Yards, four years before its 430K SF lease at 30 Rockefeller Center expires. Co-developers The Related Cos., Oxford Properties and the Kuwait Investment Authority plan to deliver the $2.5B tower in late 2028.
Starr will pay $1.3B over its 20-year lease at 343 Madison, while Deloitte agreed to pay $2.6B for its 800K SF spread at 70 Hudson Yards, according to CompStak.
“The issue is that we don’t have new products on spec,” Konsker said. “They have no choice but to look early.”
SL Green acquired the development site at 346 Madison Ave. last year and immediately set out to replace it with a boutique office building.
“My only wish is that we had the building built and ready to go today,” Durels said during the earnings call.
Last year, Vornado acquired 623 Fifth Ave., an office building previous owner Charles Cohen emptied out for a planned condo conversion. The REIT plans to spend $450M upgrading the office space, betting that a renovation — expected to wrap up by the end of 2027 — can capture some tenants that can’t wait until 2029 for a large block to open up.
“New York is now on the foothills of the best landlord’s market in 20 years,” Roth said last week. “We believe this landlord’s market in Manhattan will continue to tighten and last for a long time.”