Midtown South Leads Manhattan Office Leasing Surge in July

• Manhattan office tenants leased 3.87 million square feet in July, up 22% from June and 28.4% year over year, marking one of the borough's strongest July performances in recent years.
• Midtown South accounted for nearly half of all leasing activity, driven by Anthropic's 465,630-square-foot lease at 330 Hudson Street.
• Manhattan office availability fell to 66.24 million square feet, its lowest level since September 2020, while average asking rents climbed to $78.03 per square foot.

What Drove Manhattan's Strong July

Manhattan's office market continued its strong recovery in July, with tenants signing, renewing, expanding, or extending leases totaling 3.87 million square feet. The monthly volume represents a 22% increase over June and a 28.4% jump compared to July 2025, according to Colliers. Year-to-date leasing activity has reached 26.66 million square feet, putting Manhattan on pace for its strongest annual performance since 2000. The sustained demand continues to reduce available office inventory while supporting rental growth across the borough.

What Powered Midtown South's Momentum

Midtown South emerged as Manhattan's strongest-performing office submarket, generating 1.9 million square feet of leasing activity—nearly half of the borough's total demand despite representing just 36.3% of Manhattan's office inventory. The biggest contributor was Anthropic's lease for 465,630 square feet at 330 Hudson Street, where the AI company will occupy the building's entire 16-story office tower. The move significantly expands Anthropic's New York footprint as the company plans to double its local workforce to 1,000 employees by the end of the year. The surge in leasing activity has continued to tighten Midtown South's office market, with availability falling to 12.2%, extending a decline that has reduced available space by 36.2% since its post-pandemic peak in November 2023.

Franklin Wallach of Colliers said the latest decline is far from typical.

"You don't just see in any given month availability dropping by half a percentage point. That's a significant movement of the needle."

What the Numbers Mean for the Market

The July figures reflect more than just one blockbuster lease. Major renewals by NBCUniversal, which renewed 244,185 square feet at 1221 Avenue of the Americas, and Aon, which renewed 202,000 square feet at One Liberty Plaza, also helped fuel one of Manhattan's strongest leasing months in years. Meanwhile, office availability across the borough declined to 66.24 million square feet, its lowest level since September 2020. Midtown has nearly returned to its pre-pandemic availability levels, while Lower Manhattan has also posted steady improvements. Wallach noted that the recovery is becoming increasingly widespread across Manhattan rather than concentrated in a single submarket.

"The three markets are so unique, but I found it remarkable that, give or take a few percentage points, they're all down by about a third since their post-pandemic peaks."

What This Means for Manhattan's Office Recovery

Artificial intelligence companies continue to reshape Manhattan's office market, with AI firms leasing roughly 1 million square feet during the first quarter of 2026 alone—already surpassing their full-year total from 2025. At the same time, office-to-residential conversions, shrinking sublease inventory, and continued tenant demand have helped push asking rents to $78.03 per square foot, placing Manhattan within 1.8% of its average pre-pandemic rental levels.

Robert Getreu, Principal at Williams Equities, said the latest market data reflects what his firm has experienced firsthand throughout 2026.

"This data comes as no surprise to us. Williams Equities has long enjoyed the competitive advantages of owning a portfolio concentrated in some of the City's most desirable live-work-play neighborhoods. And the anecdotal evidence has been equally compelling; we've seen bidding wars for space and steadily rising rents since the start of 2026."

With leasing demand remaining strong and availability continuing to tighten, Manhattan's office market appears to be gaining momentum as companies compete for high-quality space in the city's most sought-after neighborhoods.