Welcome to the topic “Is the CRE Office Market Back? NYC Says “What Pandemic?“
With the massive push to “Return to Work” and the under-market value rents still available, the Commercial Real Estate (CRE) office market is on the rise. All signs point to a major uptick in commercial real estate, encouraging new investment in the sector.
Signs Pointing to Recovery in NYC
Recent reports from Colliers show Manhattan office leasing is on track to reach its highest volume since 2019, thanks to a month-over-month increase of more than 20% in August 2025. This isn’t just a modest increase; monthly leasing activity in Manhattan jumped to 3.7 million square feet, a remarkable 36.2% above the ten-year monthly average. If this pace continues, yearly volume is expected to exceed 40 million square feet for the first time since 2019.
The Push Back to the CRE Office Market: Policy and Culture
One of the biggest drivers of this turnaround is the changing stance on remote work. While the federal government’s “back-to-work” mandate set a tone, major corporations like Amazon and JPMorgan Chase are leading the charge in NYC. Amazon alone is responsible for over a million square feet of Manhattan office leasing since November 2024, not to mention JPMorgan’s $3 billion investment in their 2.5 million-square-foot Midtown headquarters.
A “Flight to Quality” Is Boosting High-End Buildings in NYC
With the increased demand in the office CRE market, we’re seeing a strong trend of businesses making a “flight to quality.” This means companies are actively leasing Class-A office buildings to take advantage of their modern amenities, excellent infrastructure, and prime locations.
Manhattan’s availability rate has tightened to 15.0%, the lowest since January 2021, and has decreased or remained stable for 18 consecutive months. The sublet availability has also diminished for the 11th consecutive month. We’re seeing newer buildings, built in 2015 or later, doing much better than older, vintage properties.
Employers want amenities and new, exciting spaces to attract workers back to the office. The average asking rent has increased across Midtown, Midtown South, Downtown, and the overall Manhattan market.
For Tenants
Now is a prime opportunity for tenants to secure great deals in the CRE Office Market. With the commercial real estate market still recovering, many landlords are motivated to fill their vacancies. This means you have more leverage to negotiate for things like lower rental rates, extended rent-free periods, and a greater build-out allowance to customize your space.
Don’t be afraid to push for favorable terms, as landlords are more flexible than they were before the pandemic and eager to lock in reliable tenants.
For Investors
Landlords and property owners should concentrate on features that attract and retain tenants in a competitive CRE Office market. Tenants today are looking for more than just four walls; they want spaces that offer value, convenience, and flexibility. Prioritizing properties with top-tier amenities—like modern gyms, collaborative workspaces, and communal lounges—can set a building apart.
Furthermore, investing in flexible spaces that can be easily reconfigured to meet a tenant’s evolving needs, whether for a small startup or a growing corporation, is crucial. Finally, a location with easy access to public transit remains a key factor, as it broadens the potential tenant pool by making the commute easier for employees. By focusing on these areas, landlords can increase their property’s appeal and ensure strong returns as the market stabilizes.
Conclusion
As the Manhattan CRE office market rebounds, having the right commercial real estate advisor is more necessary than ever.
We’re in a pivotal moment, where understanding both the leasing activity and the evolving demands for flexibility and quality is key. The future of workspaces in NYC is not a simple return to the past, but an exciting new landscape for the future.
Also read: Has the CRE Office Market Hit the Bottom?
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