Manhattan’s office leasing market closed out 2025 by clearing a benchmark that once felt out of reach.
While there was uncertainty heading into the final weeks of December about whether enough leasing activity remained to push the New York borough over the threshold, a series of late blockbuster deals ultimately did the heavy lifting.
Preliminary year-end figures show that total new leasing surpassed the pre-pandemic annual average for the first time in five years, signaling meaningful progress in New York's office market recovery.
New office leases covering roughly 33.2 million square feet were signed in 2025, slightly above the average of 33 million square feet from 2015 to 2019. The total is expected to climb modestly as additional transactions are confirmed by CoStar’s research team, strengthening what is already a symbolically strong result.
Occupiers sought quality in 2025
About 69% of the space in new leases was in four- and five-star buildings, up from 66% in 2024. Every one of the top 15 largest leases of the year took place in four- and five-star office properties, highlighting the heightened concentration of tenant demand at the top of the quality spectrum.
Within that segment, trophy buildings stood out in 2025. About 5.2 million square feet of office space was leased in five-star office buildings in 2025, representing a 27% increase from 2024. The largest deal of that bunch came from Deloitte, which committed to 800,000 square feet at 70 Hudson Yards, a tower slated for completion in early 2029. The transaction reflects both the strength of demand for premium space and the increasingly limited supply of large contiguous blocks that meet those standards.
The path ahead
Whether momentum carries into 2026 remains an open question. New York City's office sector enters the new year with a shrinking pool of high-quality space available for lease, a new mayor whose relationship with the private sector remains uncertain, and office-using job growth that has largely stalled. Even so, surpassing the pre-pandemic benchmark resets expectations and confirms that tenants are still willing to make long-term commitments in Manhattan when the product aligns with their needs.
Note to subscribers
CoStar subscribers are invited to attend year-in-review webinars on the New York market. The webinars are set for early January and will cover the multifamily and office sectors. Please click here and here to reserve your spots for each.