Manhattan office leasing sees strongest gains in 20 years

Key Points:

• Manhattan's office leasing demand reached 11.02 million square feet in Q2 2026, marking the first time since 2002 that demand exceeded 11 million square feet for three consecutive quarters, according to Colliers.
• Demand in the first half of 2026 was the strongest in over two decades, supported by rising interest from industries such as tech/AI, legal, media, and financial services, alongside planned office-to-non-office building conversions.
• AI-related leasing increased to 800,000 square feet in Q2, surpassing the total AI leasing volume in Manhattan for all of 2025, highlighting significant growth in this sector.
• There is a notable flight to quality with strong demand for Class A buildings, but Manhattan also saw a resurgence in Class B leasing, which rose 14% above pre-pandemic levels in the first half of 2026, signaling broader market recovery.
• Availability in older Manhattan office buildings has tightened, with Class B buildings reaching a record high in average asking rents, reflecting increased demand and limited supply.