Report: Things Are Looking Up, Finally, for Office Leasing Downtown

Office leasing has now risen to pre-pandemic levels, according to the Downtown Alliance's Year in Review Report. Photo: Carl Glassman/Tribeca Trib

The office market in Lower Manhattan is rebounding in a big way. 

New leasing below Murray Street last year doubled the 2024 total, “making it the most active year for the office market since 2019,” the Downtown Alliance said in its year-end report [1] for 2025.

That’s a far cry from the business improvement district’s report for 2024, which noted at this time last year that the office market had its “worst performance in memory.” 

Conversion of buildings from commercial to residential further reduced the amount of empty office space, with 14 new residential conversions announced over the past two years, according to the report. The Alliance also noted that, for the first time, the population of the district is expected to exceed 70,000.

Tourism remained strong and retail openings (mostly food-and-beverage businesses) saw a big increase over 2024. “We hope that this energy and momentum will continue into 2026 and beyond,” Downtown Alliance president Jessica Lappin said in a statement.

Below are highlights from the report.

OFFICE BUILDINGS

• Office leasing in the fourth quarter of last year was 60% above the total for the same period in 2024.

• Office leasing has risen to pre-pandemic levels.

• The 14 residential conversions over the past two years brought 32,000 apartments onto the market.

 • Finance, insurance and real estate companies accounted for about half of the new office leases signed in 2025. 

• Another quarter of the leased space came from the sector known as TAMI, technology, advertising, media and information.

• Professional services—consulting, law, medical, and architecture—accounted for about 15% of the leases.

• 22.2% of office building space was vacant.

• The largest block of vacant office space, 1.6 million square feet, is in 60 Wall Street, where Deutsche Bank completed its move to Columbus Circle.

• Overall, large blocks of empty office space increased 25% over last year.

RETAIL

• 90 stores opened and 24 closed in 2025.

• Those new openings include 59 restaurants and bars, 29 personal/business service locations and 11 shopping destinations.

• The average retail rent rose 2% to $248 per square foot compared to 2024, well below the $350-to-$400 per-square-foot rents that fluctuated between 2017 and 2021.

HOTELS

• The average daily hotel room rate is $384.93.

• There are 41 hotels with a total of 7,928 rooms located in the Downtown Alliance district.

• Hotel occupancy was 90% in the last quarter, 2% higher than the fourth quarter of 2024.

• 2 hotels are expected to open this year and another, with an undetermined date of completion, is in the pipeline.

RESIDENTIAL BUILDINGS

• The Downtown Alliance counts 350 apartment buildings and 37,033 units within its district. 

• Another 32 buildings, comprising 8,987 units are under construction or planned—68% of them are office-to-residential conversions.

• 3 residential buildings were completed last year. 

• The median monthly rent increased to $5,000, making it the highest on record. This compares to $4,555 Manhattan-wide.

• The median condo sales figure for the 4th quarter was $1,252,500, down 14% from the previous year.