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Key Takeaways
CompStak says the average Manhattan work-value package topped $90 per square foot in the first half of 2026, a record, with growth accelerating after years of near-flat allowances.
Lower-rent and non-prime deals are driving the increase, while packages for the priciest space eased to about $109 per square foot from a 2024 peak of $115.50.
Colliers sees nearly 44 million square feet of leasing, the best year since 2000, but 12.4% availability and rising construction costs keep landlords paying for tenants.
Manhattan landlords are paying record office incentives to land tenants even as leasing heats up, The Real Deal reports.
In the first six months of 2026, CompStak’s average work-value package topped $90 per square foot. That is a record, and it is growing faster.
Allowances Keep Climbing
Work allowances rose almost 30% to roughly $86 a foot from 2019 to 2022, then held mostly flat through 2025. They have climbed fast so far in 2026.
A September spike in building costs, per the Bureau of Labor Statistics, could lift it further.
Cheaper Deals Drive the Gains
CompStak’s Alie Baumann says allowances are at a nominal record even as leasing tilts toward higher-rent space. But the 2026 increases come from small, cheaper and non-prime transactions.
At the top end, packages have eased from a 2024 peak of $115.50 per square foot to about $109. Leases starting under $100 per square foot made up about half of first-half space, with incentives above $77.50, an all-time high for that tier.
Zoom Out
Colliers expects just under 44 million square feet of Manhattan leasing this year, the most since 2000. Availability is still 12.4%, which Colliers’ numbers still frame as a tenants’ market.
Our Oct. 19 report on off-market leases described the other side. JLL says landlords are placing tenants in newly vacated blocks before marketing them, as Colliers showed 10.06 million square feet of third-quarter leasing and an 80% collapse in the supply pipeline.
Together the two reports show a market tight enough to lease space unlisted, yet costly enough that build-out money keeps rising.
Why It Matters
Bigger allowances eat into a landlord’s net effective rent, so record leasing does not mean record returns. Baumann notes that today’s money buys less build-out than it did in 2017.