Posted Jun 12, 2025, 12:27 AM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
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https://www.globest.com/2025/06/11/deman...e-sets-new-york-apart-from-other-cities/
Demand for Prime Office Space Sets New York Apart from Other Cities
Trophy office availability in the U.S. has barely budged while New York’s rate has plummeted.
By Erika Morphy
June 11, 2025
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A striking divide has emerged in the U.S. office leasing market, with New York City’s trophy office towers pulling far ahead of their counterparts across the country. As companies across the nation slowly return to the office, the appetite for prime space in Manhattan has reached a fever pitch, setting the city apart in a sector still grappling with the aftershocks of the pandemic.
According to Victor Rodriguez, senior director of analytics for CoStar, the numbers tell a dramatic story. Since early 2023, the availability rate in New York’s trophy buildings—defined as five-star, best-in-class office towers—has plummeted from 17% to just 10.7%. “That’s a major drop-off in a relatively short period of time,” Rodriguez told GlobeSt, emphasizing the magnitude of the shift. In stark contrast, trophy office availability in the rest of the U.S. has barely budged, declining from 23.9% to 23.6% over the same period, a change of just 30 basis points.
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This divergence is being driven by a surge in demand unique to New York. Since the start of 2025 alone, nearly 60 new leases totaling almost two million square feet have been signed in the city’s trophy buildings. By comparison, all other U.S. markets combined have seen about nine million square feet leased in the same category.
“We’re seeing tons and tons of new leasing take place over the past 18 months or so,” Rodriguez noted, pointing to recent deals like Deloitte’s lease at 70 Hudson Yards—a building that is still under construction. “People are leasing space that’s not even built here… because so much has shrunk in a short period of time,” he explained. The sense of urgency is palpable, with tenants scrambling to secure prime locations before they disappear from the market.
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Rodriguez attributes this momentum to several factors. First, New York’s enduring appeal as a business hub is underscored by recent census data showing the city’s population grew by 87,000 last year, with the broader metropolitan area adding over 100,000 residents. “People want to be in New York City,” he said. This population growth is mirrored by companies’ willingness to return to the office, often for three, four, or even five days a week—a trend not seen as strongly elsewhere in the country. The comfort of knowing that others are making similar commitments has made it easier for firms to sign long-term, high-value leases. “Sticker shock really isn’t there,” Rodriguez observed. “People are paying $100, $150, $200, $250-plus, in some cases, per square foot, to lease the space in some of these trophy buildings.” The issue is not price, but availability.
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