The flight-to-quality trend of office tenants seeking top-tier properties with desirable amenities and easy transit access may have benefited these buildings since the pandemic upended the market, but the boost doesn’t come without a cost.

Take Manhattan, the largest U.S. office market, where landlords of Class A properties are giving “historically large concession packages” in a bid to compete with trophy properties and “induce tenant commitments,” according to Avison Young’s fourth-quarter Manhattan office report released Thursday.

The gap between Class A base rents and net effective rents, which exclude free months and other tenant concessions, have hit a record high of $21.15 per square foot in the fourth quarter, more than double the $10.04 difference seen in March 2020 at the start of the pandemic.

Trophy towers aren’t resting on their laurels, either. Concession packages at those properties in Manhattan also increased significantly during the pandemic even as there has been a “steady drop-off in average tenant improvement allowances since mid-2021” that signals “continued strong demand for trophy properties and increasing landlords’ leverage,” according to the study.

The flight-to-quality trend that has persisted for several years has been exacerbated during the pandemic as New York’s “transit-oriented, top-of-market options gain leasing traction” versus commodity offerings that have struggled to attract tenants, Avison Young said in the report. From January 2018 to the COVID lockdowns in March 2020, 71.7% of leasing activity was in trophy and Class A space. That percentage has since risen to 72.8%, the brokerage firm said.

Most sought-after Manhattan office amenities such as conference centers, tenant lounges and private terraces commanded an average base rent premium of nearly 16% over other buildings without, Avison Young said. Private terraces looked to be the most coveted perk with the highest premium over base rents averaging 30.1% higher than buildings without a private terrace.

Tenants attracted to top-tier properties also are likely to call them home longer. Manhattan trophy office towers commanded an average lease term of 126 months, longer than 113 months on average at Class A buildings and 103 months at Class B and Class C buildings.

Other market reports also highlight tenant desire for coveted properties that companies hope will help attract talent and entice workers back to the office. A record 190 office leases commanding at least $100 per square foot in starting rent were signed in Manhattan last year.

These leases with triple-digit rents totaled 6.1 million square feet of office space signed in Manhattan last year, which doubled 2021’s record 3 million square feet of premium-rent leasing, according to JLL’s 2022 year-end recap study released recently. Last year’s record top-dollar deals represented a quarter of Manhattan’s total leasing volume for the year, JLL said.

Against increased concerns about economic slowdown that has led the tech sector to cut jobs and pull back in office expansion plans, the Avison Young report also echoed many other recent market reports in citing a slowdown in office leasing activity last quarter.

Total office availability in Manhattan in the fourth quarter reached a record high of 18.6%, thanks to “an abundance of both direct and sublease space,” according to the report.

Fourth-quarter office leasing declined by 46.5% to 4.94 million square feet — the lowest quarterly volume since the second quarter of 2021 and the sharpest quarterly drop since the second quarter of 2020, according to a recent Colliers study. The fourth-quarter demand was 37.4% below Manhattan’s five-year rolling average of 7.89 million square feet.