Major real estate firms report a notable recovery in NYC’s office market during the first half of 2025, driven by significant leasing activity, declining vacancy rates, and growing interest from finance, technology, and law sectors. According to Avison Young, Manhattan leasing hit 20.6 million square feet in H1 2025—a 17.2% increase from the same period last year—which marks the strongest first-half performance since 2018  . The number of major leases (exceeding 100,000 sq ft) also reached a high not seen since 2019, with 21 such transactions recorded. Cushman & Wakefield data shows that total availability in Manhattan fell to 16.4% by Q2 2025, the lowest level in over four years, as both direct and sublease spaces tightened. This contraction reflects a resurgence in demand, especially for premium office space, while older Class B and C buildings continue to face challenges. Savills and Colliers report major quarterly leasing volumes across Manhattan that have matched or exceeded pre-pandemic levels. Savills noted that leasing reached 12.2 million sq ft in Q1, the best quarterly result since 2019 . Colliers noted downtown Manhattan saw 1.99 million sq ft of leasing in Q1—tripling Q4 2024 figures and marking the strongest activity since late 2019. Key demand drivers include financial services, law firms, and private equity. A Business Insider report highlights how firms such as Blackstone, Amazon, and Alphabet have spurred renewed confidence in the market. Major tenants like Amazon, Citadel, and Citigroup, along with law firm Goodwin Procter’s move to BXP’s 200 Fifth Avenue, indicate broad-based uptake. In Midtown, trophy office spaces have seen rental rates recovering; asking rents for Class A space have edged upward even as overall including sublease stock dipped 2.1% year‑on‑year . Meanwhile, projects such as 70 Hudson Yards have secured large pre-leases—Deloitte recently signed on for around 800,000 sq ft, one of the largest post-pandemic deals in the U.S. Despite positive trends, market experts caution that older assets without modern amenities or sustainability credentials may be left behind. Redevelopment strategies—including converting 5 Times Square into residential units—are underway, reflecting efforts to adapt to shifting demand. Looking ahead, limited new construction and continued tenant demand suggest tight supply and competitive rents will persist in the second half of 2025. However, broader economic and political uncertainties—including potential shifts in fiscal policy in NYC—may influence leasing patterns and investor appetite. Overall, the H1 data underscores that Manhattan’s office market has clearly turned a corner, with leasing volumes, occupancy figures, and investor interest all pointing toward a sustained recovery in the city’s commercial core. Source: Comp.