Midtown office mkt - 2025 wrapped

2025 Wrapped

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Executive Summary - Tenant Perspective

Market Snapshot
Midtown Manhattan office leasing has quietly shifted from recovery to normalization. Based on on-the-ground transaction activity throughout 2025, tenants are no longer operating in a wait-and-see market - they are competing, committing, and making longer-term decisions with intention. By every measure we track: more deals, larger commitments, longer lease terms, and materially more competition for good space, 2025 was our most active year.

Key Observations

Despite widespread predictions of tenant hesitation (congestion pricing, mayoral elections, etc.) decision-making remained active throughout the year. Requirements stayed live, tours continued, and deals moved forward. In many cases, delaying decisions reduced optionality rather than improving leverage.
Demand is no longer confined to trophy or newly repositioned buildings. Well-located Midtown assets with efficient, smaller floor plates are now among the most competitive offerings, leasing faster due to fit, flexibility, and practicality.
Since mid-year, most tenant-side transactions we worked on had a credible backup tenant right behind us - a notable shift from prior years when tenants could move slowly with little risk. Good space is being absorbed while internal discussions are still ongoing.
Median lease terms have lengthened, signaling renewed confidence in Midtown as a durable operating location rather than a short-term hedge.
Vacancy has tightened, absorption has been positive for over a year, and asking rents have stabilized in the high-$70s to low-$80s PSF range.

Implications for Tenants
Leverage still exists in Midtown, but it increasingly favors tenants who are prepared, informed, and decisive. The best outcomes are being achieved by companies that start early, define priorities clearly, and act when the right opportunity appears - rather than waiting for conditions to improve.

Until next year,

Ben