Manhattan Office Market
Available space has declined eight consecutive quarters, falling 25.1 MSF since 1Q24 and lowering availability from 19.5% to 14.6%. Leasing recorded 12.9 MSF in the first quarter, the highest output since 4Q19, driven by Bank of America’s 2.4-MSF renewal & expansion at 1 Bryant Park. Tech/Media requirements reached the highest level in more than 10 years at 8.8 MSF, 22.1% of which is from Artificial Intelligence firms. The resurgence of the tech sector has driven availability down in the Midtown South market to 16.9%, the lowest level since 4Q20. Direct availability in Midtown trophy assets dropped 30 basis points to 3.4%. The direct availability rate within the trophy set has not registered a quarterly rise since 1Q23. Rental rate recovery continued as overall asking rents grew to $78.25/SF. Manhattan overall rents remain 4.2% below the 1Q20 average, yet Midtown class A asking rents are 9.3% higher. Absorption closed the first quarter at 344,630 SF, marking three consecutive quarters of positive absorption for the first time since 2014.16.7 MSF has either commenced conversion or is planning to do so, following 3.9 MSF of buildings converted since 2020.