Permits & development · Deals & development · 11/02/2026
Manhattan office leasing heads for its best year since 2000
Manhattan office leasing is on pace for its strongest year since 2000, led by finance, law firms and tech. Little new construction and space lost to office-to-residential conversions are pushing tenants to sign early. Experts warn that a possible AI bubble, inflation and high interest rates could slow the boom.
Reported by The Real Deal · New YorkRead the original ↗
What happened
Manhattan office leasing is on track for its best year since 2000, The Real Deal reported on 11/02/2026. If the pace holds, Colliers projects 43.81 million square feet of office leasing for 2026. That would beat the 42.01 million square feet recorded in 2001. It would still trail 2000, which set the record at 50.9 million square feet.
The demand is coming mostly from finance and law firms, with tech also growing. The largest deal of the year, and the largest in Manhattan in six years, is law firm Simpson Thacher's 916,000-square-foot lease to anchor Gary Barnett's new tower at 570 Fifth Avenue. AI tenants leased about 800,000 square feet in the second quarter. The New York State Comptroller's office reported Wall Street profits of nearly $46 billion in the first half of the year.
Supply is tight. Apart from JPMorgan Chase's own headquarters at 270 Park Avenue, Manhattan has not seen a new office building since One Vanderbilt opened in 2021. The pandemic paused new construction, and office-to-residential conversions have taken more space off the market. Colliers research director Franklin Wallach said tenants with leases expiring in the next few years are starting their searches earlier than usual.
The article also lays out the risks. These include talk of an AI bubble, inflation, the Iran war and high interest rates. The 10-year U.S. Treasury yield hit 5.73 percent a few weeks before the report, its highest level since 2002. Cushman & Wakefield put the recent average Manhattan office rent at about $74 per square foot, compared with roughly $49 in 2000.
Key facts
- Projected 2026 leasing
- 43.81 million sq ft (Colliers)
- Record year
- 2000, 50.9 million sq ft
- Largest 2026 deal
- Simpson Thacher, 916,000 sq ft at 570 Fifth Avenue
- Developer
- Gary Barnett (570 Fifth Avenue)
- AI leasing, Q2
- About 800,000 sq ft
- Wall Street profits
- Nearly $46 billion in first half of year (NYS Comptroller)
- Average office rent
- About $74 per sq ft recently, vs. roughly $49 in 2000 (Cushman & Wakefield)
- 10-year Treasury yield
- 5.73 percent, highest since 2002
What it means
Landlords
This is a Manhattan commercial office story. It does not change rules for residential buildings. The article does say office-to-residential conversions are taking office space off the market, which shows that conversions remain active.
Tenants and voucher holders
Nothing in this report changes rent rules, voucher amounts or apartment availability. It covers office space, not homes.
Buyers and owners
High interest rates are named as a risk to the boom. The 10-year Treasury yield at its highest since 2002 also matters for anyone financing property.
The highlights
- Colliers projects 43.81 million sq ft leased in 2026, behind 2000's 50.9 million.
- Simpson Thacher's 916,000 sq ft lease at 570 Fifth Avenue is the year's largest.
- The 10-year Treasury yield hit 5.73% in early October, its highest since 2002.
Why it matters Landlords
Office-to-residential conversions and high interest rates link this office boom to housing supply and borrowing costs for owners.
Not known yet
- How many residential units the office-to-residential conversions mentioned will produce, and where
- Whether 2026 will actually finish at the 43.81 million sq ft Colliers projects
- Whether the office boom affects residential rents in Manhattan or other boroughs
- When the 570 Fifth Avenue tower is expected to open
Background
In New York City, commercial leases such as office leases are not covered by rent stabilization or other residential rent rules. Office rents and terms are negotiated between landlord and tenant. Residential rent-stabilized leases are governed by state law and administered by HCR. Office-to-residential conversions require building and zoning approvals, including from DOB, before people can live in the converted space.
Buildings in this story
- 270 Park Avenue · building facts and open city records
Summary written by Bulwark from The Real Deal · New York’s reporting. The original story is at therealdeal.com. This is general information, not legal advice.
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