Manhattan’s office leasing market showed strong growth in the third quarter, driven by major deals from companies such as Deloitte, Guggenheim Partners, and Salesforce. According to a report from Colliers, tenants leased 9.4 million square feet of office space during the period. This represents a 2 percent increase compared to the previous quarter and is nearly 27 percent higher than the five-year quarterly average.
The total leasing volume for the year has surpassed 30 million square feet, exceeding pre-pandemic levels and marking the highest year-to-date demand since 2002. If this pace continues through the end of the year, total leasing could reach over 40 million square feet—about 20 percent more than in 2024—but may still fall short of the 43 million square feet leased in 2019.
Among notable transactions, Deloitte signed an 807,000-square-foot lease at Related’s 70 Hudson Yards—the largest lease of the quarter and third-largest so far this year. Guggenheim Partners renewed and expanded its presence with a 359,000-square-foot deal at Munich Re’s 330 Madison Avenue. Salesforce also renewed and expanded its lease with a 311,000-square-foot agreement at La Caisse’s 3 Bryant Park.
The increased demand has reduced vacancy rates. Office availability dropped to 14.6 percent—the lowest level since December 2020—after six consecutive quarters of tightening supply. The amount of sublet space available has declined by nearly 40 percent over two years and is now close to levels seen before the pandemic.
Average asking rents rose to $74.89 per square foot, reaching their highest point since late 2023 but remaining almost six percent below where they stood in March 2020. Class B offices saw rents rise by more than three percent to $67.83 per square foot; meanwhile, Class C office rents fell to their lowest point in over ten years.
Investor interest also returned during the quarter. Eleven office buildings were sold for a combined $1.6 billion, including RXR, Elliott Investment Management and Baupost Group’s $1 billion purchase of 590 Madison Avenue.
“There were continued signs of the Manhattan office market recovering in virtually every measurable way during the third quarter,” said Franklin Wallach of Colliers. “Although the march towards recovery has been building… the momentum must continue through the end of 2025 and into 2026 for full recovery to be achieved.”
