Manhattan office leasing reached 11.4 million square feet in Q1, marking the strongest first-quarter performance since 2019. Demand was anchored by a return of large-format activity, highlighted by 16 leases of 100,000 square feet or more that totaled roughly 4.0 million square feet. This sustained velocity pulled Manhattan’s overall availability rate down by 70 basis points quarter-over-quarter to 15.7%—the fourth consecutive quarterly decline. Concurrently, the average asking rent rose to $74.53 per square foot, registering its first net increase in seven quarters.

Submarket performance varied significantly by geography and asset class:

• Midtown: Led the borough’s recovery as availability compressed to 14.9%, the lowest level recorded in more than four years. Leasing was heavily concentrated in Penn Plaza/Garment Market (1.8 million square feet), Grand Central (1.79 million square feet), and the Plaza District (1.43 million square feet).

• Midtown South: Availability sat at 17.1%. While still elevated against its 9.1% pre-COVID baseline, technology and media demand drove an inversion of historical leasing behavior: Class A spaces captured 44.6% of sector volume, outperforming Class B assets (36.7%) as tenants prioritized renovated space.

• Downtown: Logged approximately 2 million square feet of leasing volume. Activity was anchored by a major expansion from Jane Street Capital, which increased its Brookfield Place footprint at 250 Vesey Street to nearly 1 million square feet.