Here is the number worth carrying into your next investment committee meeting: 150,000 square feet.
That is the entire distance between Midtown Manhattan’s office availability today and where it stood in March 2020 — the month the market broke. One full-floor deal at a large tower. One mid-sized tenant consolidating. That is all that separates the most-watched office submarket in America from a statistic nobody thought they would see again this decade.
If you underwrite Manhattan office, broker it, lend against it, or own a single square foot of it, the August Colliers data just moved your baseline. Let’s get into what it actually says — and, more importantly, what it does not.
The Headline Number, and the Better One
August leasing across Manhattan hit 3.25 million square feet. On its own, that reads as a soft month: down 16 percent from July. Context flips it entirely.
- 13 percent above the five-year monthly average
- 16 percent above the ten-year monthly average
- Year-to-date volume: 29.91 million square feet, up 9.4 percent year over year
Hold that pace through December and 2026 becomes New York City’s strongest office leasing year since 2000. Not since the pandemic. Not since the GFC. Since the year the first dot-com bubble was still inflating.
But leasing volume is a flow measure, and flow measures flatter. The stock measure is where the real story lives — and the stock measure is availability.
Midtown closed August with 27.86 million square feet of available space. In March 2020, it had 27.71 million. The delta is 150,000 square feet, which in a submarket of that size is a rounding error waiting to be erased.
“Some areas of the market, like Midtown, are already at the doorstep, and one step from crossing over into getting back to the pre-pandemic level of availability. That is a very big checkmark in terms of recovery.” — Franklin Wallach, Executive Managing Director of Research and Business Development, New York, Colliers
Where August’s Volume Actually Came From
Two submarkets did essentially all of the work. Midtown posted 1.54 million square feet. Midtown South posted 1.53 million. Together: 3.07 million of the month’s 3.25 million.
That concentration matters more than the headline. This is not a broad, rising-tide recovery lifting every corridor equally. It is a flight-to-quality market that has become a flight-to-location market, and the locations winning are the ones with transit density and renovated prewar stock.
The four deals that drove the month:
- Havas Health Network — 254,000 sf extension and expansion at 200 Madison Avenue, owned by George Comfort & Sons, Loeb Partners Realty and Jamestown.
- The City of New York — 174,000 sf extension at Vornado Realty Trust’s 260 Eleventh Avenue.
- General Atlantic — 150,000 sf at Related Companies’ planned tower at 625 Madison Avenue.
- KeyBank — 113,000 sf renewal and expansion at Rithm Capital’s 1301 Sixth Avenue.
Read that list again and notice the pattern. Three of the four are extensions, renewals, or expansions of existing tenancies. Only General Atlantic represents genuinely new commitment to new product — and even that is a pre-lease at a tower that has not been built.
The Sublease Signal Is the One I’d Watch
If I could keep only one metric from this report, it would not be availability. It would be sublease inventory.
Sublease space is the market’s confession booth. It is what tenants list when they have more space than headcount and no confidence that the gap closes. It ballooned through 2020 and 2021 and became the single clearest read on how much shadow supply was hiding behind official vacancy figures.
It is now at 10.07 million square feet — the lowest level since August 2019, and down 22.3 percent year over year.
That is a genuinely structural datapoint. Sublease space does not drain because sentiment improved. It drains for three reasons, all of them real:
- Tenants reabsorb it because headcount actually grew
- Landlords recapture it and re-lease it as direct space
- Leases simply expire and the overhang rolls off
Whichever mix you assume, the shadow supply that hung over every 2022 and 2023 underwriting model has substantially cleared.
Meanwhile, Manhattan’s overall availability rate fell 0.2 percentage points to 12.5 percent, with total availability down to 65.4 million square feet — the lowest since September 2020.
Now the Part Nobody Puts in the Press Release
Rents. Average asking rents dipped 0.2 percent from July. They are up 4.2 percent year over year.
Sit with that. Availability is at a six-year low. Sublease overhang is at a seven-year low. Leasing is tracking toward a 26-year high. And asking rents moved down month over month and up a mere 4.2 percent annually — which, against the cost of capital and the cost of construction over that same window, is not obviously a real gain at all.
That disconnect is the actual story, and it tells you three things:
- Concessions are still doing the heavy lifting. Free rent and TI packages remain elevated. Asking rents are a sticker price; net effective rent is the transaction. The gap between them has not closed as fast as the availability figure implies.
- The recovery is compositional. Trophy and renovated Class A product is clearing at strong numbers. Commodity Class B and C is not — it is being withdrawn, converted, or quietly held off market, which flatters the availability denominator without any tenant signing anything.
- Landlord pricing power lags occupancy by quarters, not weeks. If availability truly crosses below March 2020 and stays there, pricing follows. It just has not yet.
What This Means for Your Book
If you own Midtown Class A: your leverage inflected sometime in the last two quarters. Start testing the concession package before you test the face rent — that is where the margin returns first.
If you’re a tenant with a 2027 or 2028 expiration: the window where you held all the cards is closing. Renewal economics in Midtown will not be better next year than they are this year. Move your timeline forward.
If you’re underwriting acquisitions: stop using 2021–2023 sublease assumptions. A 10.07 million square foot sublease market prices differently than a 13 million square foot one, and the exit cap you defended last year on shadow-supply grounds is harder to defend now.
If you own commodity Class B: none of this is about you yet. The recovery has not reached the bottom half of the stack, and the availability figure is partially a story about product leaving the market rather than tenants entering it.
The Honest Caveat
One data point is not a trend, and August is a thin month. A 16 percent month-over-month decline in leasing is still a decline. And “one big lease away” cuts in both directions — a single large tenant giving back space puts Midtown right back where it was.
Recovery narratives are seductive precisely because they are clean. This one has a real asterisk sitting in the rent line, and anyone selling you Midtown on the availability number alone is not showing you the whole report.
The Move
Pull your Midtown comps from Q3 2019 and Q3 2026 and put them side by side — face rent, net effective, concession package, term. If availability is genuinely back to pre-Covid, the economics should be converging too. My read is that they are not, and the size of that remaining gap is the single most useful number in your market right now.
Run that comparison this week. Then tell me what you found — I want to know whether your book agrees with the headline.
Source: The Real Deal.
