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May 2026

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May Midtown Office Memo:
REIT talk vs. reality

Midtown office REITs are always talking their book. That’s part of the job.

So whenever landlords or public CEOs start talking about tightening markets, rising rents, shrinking concessions, or improving fundamentals, the instinct is to discount it entirely.

Fair enough. But sitting in the middle of Midtown leasing activity every day, I’ll say this plainly: their narrative is probably closer to reality than many people realize. The disconnect is timing.

Wall Street analysts, headlines, and market sentiment tend to lag what’s happening on the ground because office leasing activity takes time to show up in the data. Deals negotiate quietly for months. Renewals never hit public availability reports. Space disappears before it’s marketed. But in the trenches where we operate, the tone has changed.

We’re seeing spaces lease up faster by a multiple than they would have 12-18 months ago. We’re seeing multiple tenants circling the same opportunities. We’re seeing landlords push rents not just every few months, but in larger increments in the better buildings because they can. We’re seeing deals disrupted mid-stream because ownership suddenly sells the asset to a bullish buyer, receives stronger interest from a larger, existing, or higher-paying tenant, or simply reprices based on improved demand - all of which has become a regular occurrence in our deal pipeline.

A few recent earnings calls reinforced a lot of what many brokers are already seeing firsthand:

SL Green referenced its strongest first-quarter leasing volume ever and spoke openly about concessions tightening.
Vornado described Manhattan office fundamentals as the strongest in over a decade.
BXP discussed AI-driven demand clustering into gateway markets like New York.

Again, REIT executives are incentivized to be optimistic. Nobody should blindly accept landlord commentary at face value. But it’s also a mistake to dismiss all of it as fiction simply because it conflicts with an outdated office narrative.

The more important point is this: Midtown is no longer one market.

Commodity buildings still face real challenges. Older product without capital, infrastructure, or location advantages remain under pressure. But well-located, institutional-quality buildings simply do not have enough space to satisfy current demand.

Availability is shrinking quietly through renewals. Tenant improvement dollars are getting allocated faster. Asking rents continue grinding upward in the buildings tenants actually want.

Case in point: 9 West 57th Street (a building that is more than 50 years old) just signed a lease north of $300 PSF. Put differently, there are office buildings elsewhere in Midtown today where you could buy two entire buildings combined for roughly the same per-square-foot price another company is now paying simply to lease space there. Buildings that were asking $80 PSF just 24 months ago are now quoting $130 PSF without blinking.

That doesn’t happen in a weak market. The mistake many are making is assuming the Midtown office recovery would look obvious and uniform. It isn’t. It’s selective, uneven, and happening building by building, tenant by tenant, often quietly before the broader market notices.

The best buildings are tightening. Landlords are regaining confidence. And the gap between “office space” and office space people actually want continues to widen rapidly.

Until next month,

Ben