From the Real Deal:
Manhattan office leasing is back, baby
After finishing last year on a high note, the Manhattan office market came out the gate even hotter in 2025.
Office leasing volume reached 12.2 million square feet in the first quarter, the most since the fourth quarter of 2019, when the borough logged 12.7 million square feet, according to a new report from Savills. The leasing boom comes as work-in-office rates reach 76 percent of pre-pandemic levels, with one in four employers planning to further increase office attendance, according to The Partnership for New York City.
“Manhattan, in general, is in a class of its own right now as far as major U.S. office markets,” said Savills’ Matthew Schreck, a co-author of the report. “We’ve had three to four straight quarters of continually accelerating demand. The reason is due in part to the tenant mix that exists in this market… and their attitude towards work on-site.”
The market was boosted by a wave of large leases, including 16 deals for 100,000 square feet or more.
The largest lease of the quarter, according to Savills, was Jane Street Capital’s 400,000-square-foot expansion at Brookfield’s 250 Vesey Street, which increased the firm’s footprint to nearly 1 million square feet. Eight of the ten largest leases were renewals, some including expansion components.
The second-largest lease was Horizon Media Group’s 367,000-square-foot renewal at Hudson Square Properties’ 75 Varick Street. Universal Music Group’s 334,000-square-foot lease to relocate to Vornado’s Penn 2 office tower, came in third.
Availability continued to tighten, especially in Class A buildings. The overall availability rate was 17.7 percent, down from 20 percent a year ago. Availability at the highest-end buildings, classified as trophy and Class A+, dipped below 12 percent across Manhattan and fell to 7.5 percent in Midtown.