Midtown South Market Analysis: What You Need to Know
Going Into 2026

Record-Breaking Leasing Activity
Midtown South reached new heights in 2025 as the market hit its highest-ever annual leasing
total of 8.06 million sq. ft. To put this in perspective, the 2024 leasing total was 4.5 million sq.
ft., and the previous record was 7 million sq. ft. in 2019.
A Q4 burst of 2.29 million sq. ft. of new leasing capped off this red-hot year. Renewal activity
also finished strong at roughly 460,000 sq. ft., boosting the annual renewal total to 1.30 million
sq. ft.—well ahead of the 1.12-million-sq.-ft. five-year average.

Absorption and Availability

• Net Absorption: Totaled 1.05 million sq. ft. in Q4. This was the second time in 2025 that
  quarterly net absorption topped the one-million mark, pushing the annual total to an all-
  time high of 3.69 million sq. ft.
• Availability Rate: Fell to 18.3%, its lowest level since late 2021. Despite the decline, the
  rate remains approximately double its pre-2020 level.
•  Asking Rents: Midtown South’s overall average asking rent saw little movement
  throughout the year, finishing Q4 at $84.77 per sq. ft.—the highest of Manhattan’s three
  submarkets.

Deal Size Trends

Q4 2025 saw a rare blend of activity across all block sizes—a departure from a submarket
typically driven by smaller deals.

• Large Blocks (50k+ sq. ft.): Reached nearly 850,000 sq. ft. in Q4, the second-largest
  quarterly total since Q3 2019. Annual activity for these large blocks reached 3.03 million
  sq. ft.
• Small Blocks (<50k sq. ft.): Remained robust at 1.44 million sq. ft. for the quarter. The full-year total of 5.03 million sq. ft. for small blocks was the highest in more than 20 years.

Notable Deals:

• NYU: 1.08-million-sq.-ft. mega-lease at 770 Broadway.
• Goodwin Procter: 244,000-sq.-ft. relocation from Midtown to 200 Fifth Avenue.
• Baruch College: 162,000-sq.-ft. lease at 63 Madison Avenue (the largest new lease of
  Q4).

Sector Performance

Financial Services The financial services sector ranked among the top three industries for the
fifth consecutive year, capturing a 16% share of 2025 activity. Key transactions included:

• Capital One Labs: Expanded by 115,000 sq. ft. at 114 Fifth Avenue.
• Coinbase: Leased an additional 93,000 sq. ft. at 1 Madison Avenue.
• BILT Rewards: Leased the entirety of 837 Washington Street (40,000 sq. ft.).

Flex Space Flex space providers saw a revival in 2025, capturing 5% of activity and entering the
top five sectors for the first time since 2020. While WeWork and Industrious remained active, the
standout deal was boutique firm Le Parc’s 80,000-sq.-ft. lease at 287 Park Avenue South.

Sublease Inventory & Development

Sublease space continued the rapid reduction trend that began in 2023. Total available sublease
space fell to 1.95 million sq. ft. by year-end—the lowest level since January 2020. Sublease
space now accounts for a minimal 12.9% of total available inventory.

New Deliveries: Midtown South currently has no active projects under construction. Two
boutique projects were delivered in 2025:

• 1 St. Mark’s Place: 49,000 sq. ft. (Noho/Soho/LES).
• One High Line (500 West 18th St): 47,000-sq.-ft. mixed-use development (Chelsea)

Please feel free to reach out to me with any questions or to discuss any commercial real estate
requirements for New York City.