It was another strong quarter of office leasing in Manhattan, and the spillover in demand is likely going to hit the market\u2019s Class A-minus and Class B space next as top-tier Class A space fills up.<\/p>\n
With more than 10.4 million square feet of leases signed in the first quarter of 2026, Avison Young<\/a> researchers believe the office market has stabilized in its upward trajectory, with midsize leases between 10,000 and 50,000 square feet keeping the momentum going, according to a new report<\/a> from the brokerage.<\/p>\n SEE ALSO: Stellar Dispensary to Open 6K-SF Cannabis Shop in Queens Village<\/a><\/p>\n Colliers<\/a>, which also released a first-quarter Manhattan office report, put office leasing volume for the period a bit higher at 11.78 million square feet, less than 1 percent off the previous quarter and the strongest single first quarter the firm has tracked in six years.<\/p>\n Manhattan\u2019s leasing volume during this year\u2019s first quarter was similar to the first quarter of 2025, but it was 41 percent above the average volume from all quarters spanning 2020 to 2024, according to Avison Young. The steady uptick in leasing is a result of tenants seeking high-quality space \u2014 or as high-quality as they can get.<\/p>\n \u201cThere\u2019s space at the top of the market that\u2019s been spoken for, so I think there are those who are trying to get ahead of those decisions and lock down the next quality of space before it also gets competitive there,\u201d Vikrant Ghate, Avison Young\u2019s market intelligence manager in New York City, told Commercial Observer. \u201cI would say the next quality of space is [remaining] Class A and select Class B.\u201d<\/p>\n Meanwhile, Manhattan\u2019s availability rate decreased to 14.6 percent in the first quarter of 2026, compared to 17.3 percent in the same period last year, Avison Young\u2019s report found. Colliers identified a citywide availability rate of 13.7 percent, a promising figure that remains elevated above the 10 percent rate that Franklin Wallach, executive managing director of research and business development at Colliers, called Manhattan\u2019s market equilibrium.\u00a0<\/p>\n The slowly declining availability rate comes as the number of renewal leases diminished from representing around 50 percent of all deals in 2023 to only about 20 percent today, according to Avison Young. The other 80 percent of deals, according to the brokerage, have been for new leases and expansions, led mainly by finance, insurance and real estate firms.<\/p>\n Some of the biggest leases of the quarter included Bank of America<\/a> adding 600,000 square feet to its lease at the Durst Organization<\/a>\u2019s One Bryant Park to occupy almost the entire 2.44 million square foot building in mid-March<\/a>.<\/p>\n Trailing behind was law firm Gibson, Dunn & Crutcher\u2019s 362,000-square-foot renewal at 200 Park Avenue and financial operations firm Ramp<\/a>\u2019s 285,303-square-foot lease<\/a> at Williams Equities\u2019 28 and 40 West 23rd Street. Those deals were followed by sports platform Fanatics<\/a>\u2019 210,000-square-foot takeover at 95 Morton Street and artificial intelligence research firm Clay<\/a> Labs\u2019 deal for 202,875 square feet<\/a> at 11 Madison Avenue.<\/p>\n The average asking rent across Manhattan, which ranged between $77.55 and $91.52 per square foot in the first-quarter reports, is also shifting rapidly.<\/p>\n Average asking rents for Class A products reached their highest level since July 2020, and Class B asking rents grew by 1.9 percent to a record high, according to Colliers\u2019 Wallach. The record rents were driven by demand in the technology sector, removal of underperforming space via office conversions, and the shrinking supply of space available for sublet, Wallach told CO.<\/p>\n \u201cWe actually have less sublet space today than we did in March 2020, and that was a key metric in determining when we\u2019re arriving at recovery,\u201d Wallach said.\u00a0\u00a0<\/p>\n In addition, Avison Young\u2019s Oliver Petrovic said asking prices are often changing before tenants\u2019 very eyes, and often in the middle of a negotiation.<\/p>\n \u201cI think it\u2019s a combination of landlords feeling particularly bullish,\u201d Petrovic said in an interview. \u201cBut also, again, [there are] certain inventory challenges within certain sectors where there are fully amenitized buildings, [and] maybe they\u2019ve underwritten their property in a way where they need certain face rents and demand as such that they feel they can raise rents.\u201d<\/p>\n Mark Hallum can be reached at mhallum@commercialobserver.com<\/a>, and Emily Davis can be reached at edavis@commercialobserver.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"It was another strong quarter of office leasing in Manhattan, and the spillover in demand is likely going…\n","protected":false},"author":2,"featured_media":182274,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[44442,73456,62767,3624,47967,2361,75,84,83,1286,9,24,63,2362,73457,73458,73455,73459],"class_list":{"0":"post-182273","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-manhattan","8":"tag-200-park-avenue","9":"tag-28-west-23rd-street","10":"tag-95-morton-street","11":"tag-channel","12":"tag-franklin-wallach","13":"tag-leases","14":"tag-manhattan","15":"tag-manhattan-headlines","16":"tag-manhattan-news","17":"tag-more","18":"tag-new-york","19":"tag-new-york-city","20":"tag-nyc","21":"tag-office-leases","22":"tag-oliver-petrovic","23":"tag-one-bryant-park","24":"tag-research-analysis-11-madison-avenue","25":"tag-vikrant-ghate"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/182273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=182273"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/182273\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/182274"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=182273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=182273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=182273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}