New York office market report

Q1 2026 activity reached 10.3 msf, in line with Q1 2025 and up 41% versus the 2020–2024 average, signaling a meaningful recovery from post-COVID lows.

Large block leasing rebounded in 2025 (+75% YoY) but slowed in early 2026 (-29% YoY). Demand is decisively shifting into the midsize segment, with 10k–50k sf deals capturing 40.5% of leasing activity in Q1 2026, a 14% increase from 35.4% a year ago, signaling deeper and more diversified momentum beyond headline large block transactions. ​​​​​​​

Overall availability is tightening with the rate decreasing to 14.6% in Q1 2026 from 17.3% a year ago, driven primarily by a steady reduction in sublease space and continued stabilization in direct deals. Trophy availability decreased 22% YoY to 16.9 msf from 21.2 msf and Class A availability declined to 25.2 msf, down 18% YoY from 30.7 msf, reflecting sustained absorption of higher quality space.

Sublet availability stands at 12.1 msf, only 2.7% higher than Q2 2019 (312.8 ksf). Class A space has seen the greatest decrease, down 13% from last quarter, with only 4.1 msf of sublet space still on the market.

Renewals have dropped from 50% in 2023 to just 20% today, a 30% decline, while new/expansion leases have surged to 80%. This emphasizes a clear shift away from renewals toward growth-driven demand and increased tenant confidence.

FIRE tenants lead expansion and new leasing activity, followed by tech then law firms, together making up over 60% of new and expansion driven demand. The market has moved beyond stabilization into a new phase where tenants are not renewing or right sizing but actively adding space as business visibility improves.