The Manhattan office market displays a complex landscape in November 2025. Leasing activity held steady at 2.3 million square feet (SF), aligning with October levels and exceeding the five-year monthly average by 2%. However, the direct availability rate remains elevated at 19.5%, indicating persistent challenges for landlords. Average asking rents have softened slightly to $74.23/SF, revealing ongoing tenant-favorable dynamics despite the presence of headline lease deals. The bifurcation in the market is evident as large-block activity in Midtown and select Downtown assets drives most of the volume, while smaller tenants and Class B/C properties lag behind.

Leasing activity in Manhattan reached 2.3 million SF in November, matching October’s figures and representing an uptick of 2% from the five-year monthly average. This steady leasing volume suggests resilience in select submarkets, particularly for large tenants. However, the elevated direct availability rate of 19.5% persists, highlighting a significant mismatch between demand and supply. While large blocks are seeing interest, overall tenant activity remains subdued, particularly in non-prime locations.

The direct availability rate has remained virtually unchanged at 19.5%, with sublease space stable at 4.4%. Meanwhile, average asking rents have declined marginally to $74.23/SF, indicating ongoing tenant-favorable conditions in the market. This decline, though slight, suggests a cautious approach from landlords, particularly in the face of high availability. The Value-Weighted Index, which serves as a proxy for institutional office rents, further emphasizes a bifurcated market: prime assets are stable, while secondary products face significant discounts.

Large-block deals, specifically those over 100,000 SF, have played a critical role in driving leasing volume, particularly in Midtown and select Downtown assets. However, this activity underscores a broader trend where smaller tenants and Class B/C assets continue to struggle. The divide between the performance of prime and non-prime spaces is stark, as institutional capital gravitates towards perceived safe havens in the market, leaving secondary stock at risk.

Institutional capital remains selective, focusing on prime assets with large tenants, as evidenced by the stability in rents and leasing activity within top-tier buildings. In contrast, the persistent high availability and marginal rent declines signal risk aversion toward secondary stock. This two-speed market reflects a cautious posture among lenders and investors, with capital increasingly favoring secure, high-quality assets.

The outlook for Manhattan’s office market remains mixed. If leasing activity continues to stabilize, there may be a gradual absorption of available space. However, should high availability persist, particularly in commodity spaces, broader market recovery could remain elusive. Observing the bifurcation between prime and non-prime assets will be critical for assessing future capital market trends and debt risk.