Leasing volume was robust in the first half of 2025 despite a cooling labor market

Manhattan office leasing activity totaled 8.8 million square feet (msf) in Q2 2025, bringing the mid-year total to 21.1 msf, the strongest first-half performance since 2014’s 21.8 msf. Although leasing volume eased from Q1 2025, it still marked a 1.7% year-over-year increase, defying broader macroeconomic headwinds, including a softening labor market and rising trade tensions that emerged in April. New York City office-space using employment growth has shown modest contraction in 2025, declining 0.1% year-over-year as of May. However, office market data indicates tenants continue to engage in expansionary real estate activity. New leases and relocations accounted for 66.4% of total leasing volume, and among relocation leases 20,000 square feet and greater, 79.3% resulted in an increase to total office footprint.

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