Manhattan Office Availability Hits Lowest Level Since 2020 as Leasing Stays Strong

• Manhattan office leasing reached 10.06 million square feet in Q3 2026, 16.2% above the five-year quarterly average and 19.2% above the 10-year average.
• Available office space fell to 64.76 million square feet, the lowest level since August 2020, while the availability rate dropped to 12.4%.
• Average asking rents climbed to $85.08 per square foot, the highest level since July 2020, strengthening landlords’ negotiating position.

What Manhattan’s Office Recovery Looks Like

Manhattan’s office market continued its sharp recovery in the third quarter, with leasing volume exceeding both the five-year and 10-year quarterly averages, according to the latest report from Colliers.

Office leasing totaled 10.06 million square feet during Q3, marking the fourth consecutive quarter above 10 million square feet. That is the first time Manhattan has reached that threshold for four straight quarters since 2002.

The quarter was also 16.2% above the five-year average and 19.2% above the 10-year average, although leasing declined 8.7% from the 11.02 million square feet recorded in Q2.

What Tightening Supply Means For Landlords

Available office space fell to 64.76 million square feet, the lowest level since August 2020. Manhattan’s availability rate dropped to 12.4%, marking the 10th consecutive quarter of tightening.

That is the longest sustained period of declining availability since 2007, according to Colliers.

For landlords, the trend is increasingly favorable as tenants compete for a shrinking pool of quality office space.

Michael T. Cohen, principal of Williams Equities, said:

“2026 is shaping up to be a historic year for New York's office market, with record-high rents, strong leasing velocity and a return to pre-pandemic levels of available space. For investors, these trends are a welcome offset to the pain of higher interest rates. For tenants, they signal a return to a landlord-friendly negotiating environment.”

What Rents Are Doing

Average Manhattan office asking rents climbed to $85.08 per square foot in Q3, up from $78.03 per square foot in Q2 and reaching the highest level since July 2020.

The pricing gains are particularly important for owners of high-quality buildings, where tenant demand remains strongest. Class A properties accounted for a significant share of the quarter’s leasing activity as companies continued prioritizing newer buildings, amenities and well-located space.

What Midtown South Is Driving

Midtown South recorded 4.75 million square feet of leasing in Q3, its strongest third quarter on record.

Major transactions included Anthropic’s 465,630-square-foot lease at 330 Hudson Street, Havas Health’s 254,118-square-foot expansion at 200 Madison Avenue and major activity from Snap.

The technology sector is also becoming a major source of demand, particularly as artificial intelligence companies expand their New York footprints.

What The Biggest Deals Say

The quarter’s largest transactions demonstrate that demand is coming from multiple industries.

Proskauer Rose expanded to 478,000 square feet at 11 Times Square, while Anthropic signed its 465,630-square-foot deal. NBCUniversal leased 244,185 square feet at 1221 Avenue of the Americas, while Morgan Lewis & Bockius signed a major transaction at 1251 Avenue of the Americas.

The activity is helping push Manhattan toward a new phase of its office recovery.

Franklin Wallach, executive managing director of research and business development for Colliers in New York, said:

“The Manhattan office market’s recovery continued at a rapid pace throughout the summer and into the early days of autumn. As we enter the final quarter of the year, the market is beginning a new chapter after achieving several critical recovery milestones in Q3. Notably, Class A pricing reached a new high, Midtown became the first major Manhattan market to return to its pre-pandemic level of availability and Midtown South recorded the strongest third quarter of activity on record.”

What Investors Should Watch

For Manhattan landlords and investors, the combination of shrinking availability, rising asking rents and sustained leasing velocity represents a significant shift from the post-pandemic office correction.

The market is increasingly rewarding owners with high-quality assets in strong locations, while tenants are facing a more competitive environment for premium space.

If the current leasing pace continues through the fourth quarter, 2026 could become a defining year for Manhattan office real estate.