Manhattan's office sector has rebounded to pre-pandemic leasing levels, with several key areas driving the recovery. A recent report from CBRE highlighted that in 2024, Midtown Manhattan's core submarket saw 10.6 million square feet in lease transactions, marking a 10% increase compared to the average leasing activity between 2015 and 2019.
Notably, five core Midtown submarkets, Grand Central, the Plaza, Park Avenue, Fifth/Madison Avenue, and Sixth Avenue/Rockefeller Center, have fully recovered from the pandemic's impact. CBRE also noted that this momentum is expected to continue into 2025. In the first two months of the year, these submarkets are already outperforming their historical averages, underscoring the lasting appeal of locations with proximity to transportation hubs, high-quality office spaces, and desirable amenities.
Sixth Avenue/Rockefeller Center has been particularly active, with 10 deals exceeding 100,000 square feet in 2024 and through March 1, 2025, making it the standout submarket. In comparison, Times Square/West Side and Park Avenue recorded nine and eight such large transactions, respectively.
The law and financial service sectors have been the primary drivers of leasing activity in Manhattan, accounting for 72% of all deals since the start of 2024. This surge in demand has reduced available office space, with the overall availability rate in Manhattan's office sector falling by 130 basis points to 13.4% over the past three months. Park Avenue boasts the lowest availability rate at 7.3%, while Sixth Avenue/Rockefeller Center follows at 13.4%. Times Square/West Side remains the highest at 24.2%.
Looking ahead, CBRE forecasts that another 9.5 million square feet of lease deals will be recorded in Manhattan for the rest of 2025, bringing the total to an impressive 11.4 million square feet for the year. This is the highest level of leasing activity in the last decade, surpassing the 11.3 million square feet recorded in 2018.
