When it comes to the performance of the office sector, the cream continues to rise to the top.
New York City's office sector, fresh off witnessing leasing and availability milestones to wrap up 2024, remains a standout performer.
Through the first three months of 2025, the city’s office availability rate maintained its downward momentum, falling 80 basis points. This drop was by far the steepest among major U.S. cities.
The rate of decline in New York City easily surpassed the national average, which observed a quarterly drop of just 10 basis points. Despite the notable drop in the "Big Apple," other major U.S. cities such as Denver, Boston and Houston witnessed more office space becoming available during the first quarter and contributed to the lackluster decline across the U.S.
Compared to cities that experienced a sizable decline in office availability, such as Chicago and Atlanta, the rate of decline was still doubled in New York City.
Robust tenant demand is arguably the main driver for the decline in availability. Preliminary estimates indicate that new leasing in New York City reached 7.2 million square feet across more than 960 deals.
Noteworthy tenants in the finance and tech sectors were behind some of the largest office leases during the first quarter.
On the finance side, Mizuho expanded its office footprint by 151,409 square feet, while Spanish banking giant Santander renewed its lease, totaling 191,667 square feet.
On the tech side, Amazon expanded its presence in New York City and signed a sublease for 193,431 square feet, while IBM signed a 92,663-square-foot expansion lease to bring its total footprint at One Madison Ave. to 362,092 square feet.
While the current availability rate in New York City, at 15.4%, remains elevated compared to the pre-pandemic average of 11.7%, it's clear that market conditions are pointing in a positive direction — at the very least, more so than in any other major U.S. city.