Weekly Market Report - January 6, 2026
- Broker Support
- 11 hours ago
- 8 min read
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Manhattan's office rents surged in 2025, with a record 313 leases starting at $100 per square foot, raising speculation that rents could reach $250. This trend reflects a strong demand for premium spaces, as availability decreased from nearly 20% to 13.2%. One-third of lease signings exceeded $100, with tech and media firms comprising 31% of transactions. High-floor views and premium locations remained in high demand, contributing to rising rents. Notably, Kyndryl paid $305 psf for a small space, while several other firms made significant commitments at over $200 psf.
Premium asking rents exceeded $200 at several buildings, with examples including 500 Park Ave. at $120 psf and 320 Park Ave. reaching up to $170 psf. However, some clients expressed hesitance over these inflated prices. Leases from MGX and Truist at 50 Hudson Yards, and substantial expansions by firms like Monday.com and Shopify at various locations. Space availability continues to shrink, high rents will persist, but it remains uncertain whether tenants will accept these costs or seek alternatives, indicating a potential tipping point in the market.
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In 2025, Manhattan's office market saw a significant recovery in leasing activity, with nearly 37 million square feet leased through November, surpassing total leases from 2024 and poised for the first year over 40 million square feet since 2019. The year featured notable leases, including: 1. New York University scored the largest deal, securing approximately 1.1 million square feet at 770 Broadway, marking Manhattan's largest lease since 2019. 2. Jane Street Group expanded its lease at Brookfield Place to about 984,000 square feet, highlighting activity in the Lower Manhattan market. 3. Deloitte finalized a deal for 807,000 square feet at 70 Hudson Yards, a developing project expected to be ready by late 2028. 4. Bloomberg extended its lease for nearly 500,000 square feet at 120 Park Ave. for 11 years. 5. Moody’s announced its move to Brookfield Place on a roughly 460,000-square-foot lease, marking the fifth-largest deal of the year.
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Related Cos. and Oxford Properties Group have secured a $2.45B capital stack for their new office tower, 70 Hudson Yards, which includes a $1.6B construction loan. The 72-story skyscraper will serve as Deloitte's North America headquarters, with the company committing to 800K SF, moving from Rockefeller Center. The tower is currently under construction, with foundations nearing completion, and tenants are expected to occupy spaces by late 2028. Deloitte’s lease includes a separate lobby and top-floor leasing will begin this year.
The project, designed by Gensler and Roger Ferris + Partners, aims to be New York's first all-electric, carbon-neutral office building. Initially planned for 47 stories, it was expanded due to increasing leasing demand, as prime office space availability has decreased, causing the city's vacancy rate to drop below 15%, the lowest since before the pandemic. This financing reflects the growing investor interest in top-tier office products, according to Oxford’s Dean Shapiro. The project is notable as the largest ground-up office building to begin since the pandemic, with several similar developments underway in New York City, including BXP’s 343 Madison Ave. and Ken Griffin’s 350 Park Ave. office projects.
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In 2025, New York's office market showed significant signs of recovery, with 41.9 million square feet leased, marking the busiest year since the pandemic's onset. This figure represents the highest annual leasing in Manhattan since 2019 and reflects a more than 25% increase from 2024's 33.3 million square feet. We characterized 2025 as a pivotal moment for the market, noting tenant demand nearing pre-pandemic levels, although half of the excess supply remains unabsorbed. The fourth quarter alone accounted for 11.9 million square feet of leases, the strongest since Q4 2019, featuring notable deals like Bloomberg’s 496,000-square-foot renewal and Moody’s 460,000-square-foot lease.
Additionally, Millennium Management and the New York State Attorney General's Office extended their leases significantly. The availability rate dropped to 13.9%, marking the seventh consecutive quarter of tightening or stability. However, approximately 73.6 million square feet of office space remained available by December. The average asking rent rose to $76 per square foot, still below the March 2020 average of $79.47. Midtown experienced 5.3 million square feet of leases in Q4, totaling 19.3 million square feet for the year. Midtown South saw 4.4 million square feet leased, driven by deals from Scholastic and AMC Networks, while Downtown reported 2.2 million square feet, benefitting from significant transactions. Overall, the trends indicate a continued positive shift in Manhattan's office leasing landscape for 2026 and beyond.
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Members-only boom is reshaping NYC hospitality landscape. Will it last?
Since 2003, when Soho House debuted in Manhattan, New York’s private club scene has evolved from formal to modern and exclusive venues like Zero Bond, Casa Cipriani, and Moss, attracting diverse clientele and enhancing property values. Family-oriented clubs, such as The Beginning Clubhouse in Brooklyn, have emerged to meet community needs. Brokers report over 30 clubs either operating or in development across the city, providing attractive opportunities for landlords.
However, concerns about potential market oversaturation and membership retention challenges persist. Many of these clubs emerged during the pandemic, securing favorable leases in vacant spaces. The rise of specialized clubs catering to niche markets could complicate lease negotiations, while increasing competition may pressure existing members financially, leading some operators to consider ownership for increased stability.
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The New York State Attorney General's Office has significantly expanded its presence at 28 Liberty Street in Manhattan, renewing its current 342,484 square feet lease and adding 35,954 square feet in a long-term agreement. This brings the total occupancy to 378,438 square feet across 11 floors in the Fosun International-owned office tower, with asking rent around the mid-$70s per square foot. The duration of the new lease was not disclosed, but it aligns with the end date of the existing lease. Since becoming a tenant in 2018, the AG now accounts for approximately 20% of the building's total space. Other notable tenants at 28 Liberty include fintech firm Stripe, insurance firm Allianz, and others. This expansion follows a strong fourth quarter for office leasing in Manhattan and is among the largest lease transactions of that period, alongside significant renewals by Bloomberg and Moody’s, among others.
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Here are the biggest developments filed with city this year
The largest proposed project for 2025 is Steve Cohen's casino near Citi Field, spanning 3.8 million square feet and comprising a 1,000-room Hard Rock hotel and a 5,650-person live music venue, making it the only major project filing of the year. Among the top ten developments are two city jails, a hospital, and a warehouse. Four of the largest proposed projects are residential, with developers favoring projects with fewer than 100 units to evade higher construction wage costs.
Notably, Vornado and Rudin's anticipated 350 Park Avenue, a trophy office tower in Midtown, made the list, highlighting ongoing demand for prime office spaces. Additional significant projects include new jails in the Bronx and Manhattan, a residential development in Brooklyn by TF Cornerstone, and a cancer center at Sloan Kettering. Other notable filings involve a dormitory for Fordham University students and a warehouse in Long Island City by Prologis, revealing diverse investment interests across the city.
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$835M CMBS debt set to mature on Jan. 9
Brookfield’s One New York Plaza in Manhattan has entered special servicing as it seeks to modify its $835 million CMBS loan. This action comes ahead of the loan's maturity on January 9, 2026, amid declining cash flow and occupancy rates. The loan, initially provided by Wells Fargo, Goldman Sachs, and BMO Harris Bank in 2020, restructured an earlier $750 million debt, but cash flow dropped from an expected $84.4 million to just $51.2 million last year. Occupancy went from 100% in 2022 to 83% as of September 2025.
Key tenants include Morgan Stanley, law firm Fried Frank, and New York State Office of General Services, with retail presence from Starbucks and Chipotle. Brookfield is likely to pursue an extension, showing confidence in achieving favorable terms with the special servicer. Notably, Brookfield has seen recent funding success, securing significant CMBS loans at other locations, indicating their capability in managing financial challenges. The situation underscores the ongoing distress in the Manhattan office market, with Brookfield hoping to start 2026 on a positive note regarding its CMBS debt.
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Lenders doled out dollars across asset classes in Manhattan
In November, lenders continued to show confidence in Manhattan’s real estate market with significant investments. The major deal was a $1.1 billion CMBS loan for the Deutsche Bank Center from German American Capital Corporation and Wells Fargo. This fully leased tower at 60 Columbus Circle is owned by Related Companies and sovereign wealth funds from Singapore and Abu Dhabi, with Deutsche Bank leasing over 93 percent of the space. Other notable transactions included a $280 million loan to refinance a Midtown South apartment tower owned by Vanbarton Group, which recently converted WeWork floors to residential units.
The Upper West Side’s Aire, a rental tower by Gotham Organization and Carlyle Group, secured a $260 million refinance for renovations. Nordic Trustee provided $245 million for the New York Proton Center in East Harlem, which offers specialized medical services. Additionally, Goldman Sachs and Wells Fargo backed a $167 million loan for a conversion project at 525 Lexington Avenue from a hotel to a dormitory, part of a broader student housing strategy across New York and Boston. Overall, the month's lending patterns illustrate robust investor interest across various sectors, including office spaces, residential units, medical facilities, and student housing.
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Volkswagen is establishing a new presence in Long Island City, Queens, through a 10-year lease for 66,500 square feet of space, which includes warehouse, mechanic shop, and showroom facilities. The dealership, under the name Teddy of Queens, encompasses five properties owned by Vesta Industries and Vecta Industries. Key locations within this new space are 36-45 37th Street, 47-61 37th Street, 36-61 37th Street, 37-21 Northern Boulevard, and 37-15 Northern Boulevard.
This location will serve as Volkswagen's flagship in New York City and the second Teddy Volkswagen dealership, following its original site in the Bronx. The dealership, managed by Teddy Bessen and Julio Batista, aims to generate over 100 local jobs while contributing to Queens' economic growth. It will feature a complete range of new and used Volkswagens, mechanic services, and financing options. The exact rent was not disclosed. This new dealership will take over from Kaufman Astoria Studios Lighting and has a historical connection as a former Cadillac dealership featured in the film "Cadillac Man."
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New York is initiating a $635 million redevelopment of the Hunts Point Produce Market in the Bronx, a project to modernize the aging wholesale complex critical to the city’s fresh food supply. Announced by outgoing Mayor Eric Adams, the plan is supported by city, state, and federal funds, aiming to establish a fully electric food distribution center, enhancing freight transport via rail and waterways. The redevelopment will preserve existing jobs, generate around 2,000 construction jobs, and aim to reduce diesel pollution that has impacted the local community.
Adams highlighted the market's significance in New York's food distribution and the benefits of cleaner air and better job opportunities. The project execution will be passed to the incoming Mayor Zohran Mamdani, with construction slated to start in late 2026 after necessary reviews and design work. The market, serving over 30 wholesalers and supplying about a quarter of the city's produce, has been challenged by outdated infrastructure, exacerbating health issues linked to diesel emissions in the area. The funding includes $130 million each from city and state sources, $145 million in federal grants, and a $230 million federal loan.
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