---
title: midtown office, well past bottom
---

Midtown Office Update: February 2025 - the office market shows signs of stabilizing as office leasing activity remains plentiful |

| View in browser February 2025 Manhattan Office Market Update: Stabilization, But No Quick Recovery   The Manhattan office market is showing clear signs of stabilization, with leasing activity up 25% year-over-year and availability rates declining at a record pace. After five consecutive quarters of negative absorption (more space coming vacant than leased), the past two quarters have seen over 2 million square feet of positive demand—a strong signal that tenants are re-engaging. And there’s been no shortage of chatter chatter about the return-to-office push (#JamieDiamonRant)   Much of this activity is driven by the usual suspects, FIRE & TAMI, industries with premium paying tenants favoring recently built or renovated buildings near major transit hubs. Buildings proximal to transportation hubs in the Grand Central & Penn Plaza submarkets, as well in the Park Avenue corridor, are seeing occupancy levels  near pre-pandemic levels as the “flight to quality” story remains dominant.   Anecdotally, in the last 60 days, we were notified by Midtown Landlords on 3-separate occasions that they were increasing building-wide asking rents due to the velocity of demand they were seeing. However, despite these pockets of momentum, the market is far from a full recovery; over 40 million square feet remains available, 30% higher than pre-pandemic levels.   And the biggest challenge? 60% of available space sits in older buildings that haven’t been renovated in over a decade. For these buildings, the market isn’t strong enough yet for Midtown's “spillover” office space to clear at a transactable price for Landlords; which in turn suppresses capital investment for building upgrades.   Office-to-residential conversions are still being announced (675 Third, Pfizer Building), although we don’t expect this movement to have a significant overall impact on vacancy in the near term.    Looking ahead, we expect an incremental tightening in asking rents, and eventually concessions + TI packages, as landlords still work to fill space.   Bottom line The worst seems to be behind us as our client space surveys today, relative to 18-months ago, show fewer options and increasing rents, forcing us to be more creative and opportunistic in seeking out special situational opportunities for our clients.   Until next month, Ben Ben Blumenthal Principal Broker \| Noah & Co.    The Best of February 2025 kicked off with some big-time office leases - A&E renewed its 150k+ SF space near Grand Central, Mayer Brown expanded to 330k SF on Sixth Avenue, and Capital One's new deal on Fifth Avenue brings them over 200k SF. Where was some of the smaller action? < 10k SF - Nicholas & Lence renewed it's 4k SF space at APF's 28 West 44th - PE firm Cobalt Service Partners inked a 5-year lease at 53 W. 21st St. - A 5k SF suite at Trump Tower will soon be home to Flacks Group - Kimelman & Baird re-upped its 800 Third space for 5 years 10k+ SF - GoldenTree locked in 60k SF at the GM Building - Tech company DXC is taking 11k SF at Carnegie Hall Tower - Control Solutions Group secured 20k SF at 14 Penn Plaza - Dance Company Martha Graham is moving to 1501 Broadway Interest in NYC office space returns to pre-Covid levels Read On City plans redesign of 42nd Street - focus on pedestrian safety Read On NYC leads the country in office-to-resi conversion plans Read On The latest side hustle? Owners renting out their amenity spaces Read On Vornado has big plans for its vacant Penn Plaza site Read On Congestion pricing check in: NYC netted $48 million in January Read On Noah & Co., 600 Fifth Avenue, 2nd fl., New York, NY 10020, (212) 947-7120 Manage Preferences |
| --- |