Robust tenant demand propels recovery in office fundamentals

Manhattan’s office market recovery intensified in Q1 2025 as leasing volume built on a strong fourth quarter and accelerated to 12.2 million square feet (msf), the strongest quarter since Q4 2019. Office-space using employment is also up 1.9% year-over-year, acting as a tailwind for space demand. Large lease transactions were plentiful as 16 deals of at least 100,000 square feet (sf) closed in Q1, totaling 4.0 msf. The largest transaction of the quarter was Jane Street Capital’s 983,791-sf renewal and expansion at 250 Vesey Street (Brookfield Place), which contributed to the financial services sector accounting for 41.9% of all Manhattan leasing volume. Eight of the first quarter’s ten largest leases were renewals, some with expansion components, reflecting the recent trend of many of the largest occupiers to retrench, expand and upgrade their existing spaces. However, new leases and relocations accounted for 59.4% of total Manhattan leasing volume, a sign of an increasingly healthy market as many small-to-mid-sized deals were tenants relocating or entering the market.

Read the full report