Crowds walk through midtown Manhattan on Oct. 16, 2025 in New York City.Spencer Platt | Getty ImagesA version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.Office leasing in Manhattan surged substantially higher in the fourth quarter of 2025, driven by continued return-to-office and increased tech hiring, especially for artificial intelligence.Leasing increased by more than 25% from the third quarter to 11.87 million square feet, according to Colliers. Demand was 16% higher year over year, close to 52% above the five-year quarterly average and 43.5% above the 10-year average.It was the island’s strongest single quarter of leasing since the fourth quarter of 2019, Colliers found. For all of 2025, leasing volume was the highest since 2019 and just 2.4% below 2019’s pre-pandemic total. Get Property Play directly to your inboxCNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.Subscribe here to get access today.”Manhattan’s strong performance in 2025 was not out of the blue, but was instead the continuation of a recovery that we began to feel in 2024,” said Frank Wallach, executive managing director for New York research and business development at Colliers.”Demand in 2025 was a continuation of that trend, though greatly accelerated by factors such as tenant flight to quality to attract and retain talent, return-to-office trend implementation, sizeable expansions by major tenants – such as Amazon, NYU and BlackRock – and the emerging AI industry leasing space throughout Manhattan,” he said.Wallach also noted an uptick in demand from various industries, including finance, tech, legal, education, medical nonprofit and government. The supply of available office space is still much higher, up nearly 37%, than it was at the start of the pandemic in March 2020, but much lower than the post-pandemic peak in February 2024, according to Colliers. As demand rises, the oversupply is slowly being absorbed, and Manhattan now has the tightest supply since November 2020.Tighter supply is helping to finally boost rents. Manhattan’s average asking rent was 1.5% higher in Q4 than the previous quarter and, at $76 per square foot, was …
