Manhattan office rents keep climbing.
The borough’s average asking rent climbed to $78.03 per square foot in the second quarter, its highest level since July 2020 and just shy of the March 2020 average of $79.47, according to a new Colliers report. Asking rents rose 5.7 percent over the past year, the sharpest midyear increase since 2016, as large blocks of lower-priced space disappeared from the market and landlords commanded top dollar for the big blocks of space coming online.
The rent gains come as Manhattan’s office market continues to tighten after two years of steady recovery. The availability rate fell to 13 percent in the second quarter, down from 13.7 percent in March and marked the ninth consecutive quarter in which availability either declined or held steady, according to Colliers.
Tenants inked deals for 11 million square feet during the second quarter, down about 6.5 percent from the first quarter but up about 19 percent year-over-year. The first half of 2026 logged 22.8 million square feet of leasing, the strongest first-half performance since 2002. If that pace continues through the end of the year, Manhattan would record its busiest leasing year since 2000, per Colliers.
Sublet space shrunk by 22 percent over the last year to about 9 percent below pre-pandemic levels.
The quarter’s largest lease was Simpson Thacher & Bartlett’s 916,000-square-foot deal at Extell Development’s 570 Fifth Avenue, followed by L’Oréal’s 484,000-square-foot renewal at Related Companies’ 10 Hudson Yards and Cleary Gottlieb Steen & Hamilton’s 476,000-square-foot lease at Brookfield Properties’ 1 Liberty Plaza.
Class A buildings captured nearly 69 percent of leasing activity. The artificial intelligence sector also continued to snap up space in the second quarter, leasing roughly 800,000 square feet. That surpassed the 790,000 square feet AI companies leased during all of last year.
Meanwhile, office investment sales showed signs of stabilization. Manhattan recorded 15 office transactions totaling $1.4 billion during the quarter, matching last year’s volume, though the median price dipped to $50.5 million, down from $56 million year-ove-year, per Colliers.
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