The Strength of Manhattan’s “Better Buildings” in the Midtown Core 

While Manhattan’s overall office availability rate stands at 18.5%, the Midtown Core’s “Better Buildings” demonstrate remarkable resilience, with an availability rate of only 9.9%. The Midtown Core, defined by the Grand Central, Sixth Avenue/Rockefeller Center, Fifth Avenue/Madison Avenue, Park Avenue, and Plaza District submarkets, exhibits this strength for several key reasons:

Factors Driving Midtown Core Demand:

1. Enhanced Commuter Convenience: In the post-COVID era, facilitating a smooth return to the office remains a challenge for many employers. The Midtown Core&  proximity to Grand Central Terminal and the Long Island Rail Road (LIRR) connection offers unparalleled commuter convenience, a distinct advantage over Midtown South and Downtown.

➡️ For insights into how accessibility impacts leasing decisions, read How Long Does It Take to Find a New Office Space in New York City.

2. Premium Office Environments: High-quality buildings with comprehensive amenities are crucial for attracting employees back to the office. The Midtown Core boasts a concentration of these premium properties.

➡️ To learn more about tenant preferences for high-quality spaces, visit Blend and Extend.

3. Strategic Tenant Upgrades: During the market downturn of 2021-2023, many tenants seized the opportunity to upgrade to superior buildings. While incurring higher per- square-foot costs, many mitigated the overall financial impact by downsizing their office footprint, maintaining similar annual rent expenditures.

➡️ For examples of major leasing transactions during this period, check out The 15 Largest NYC Leasing Transactions of 2024.

4. Dominance of High-Value Industries: The Midtown Core is predominantly occupied by financial services and legal firms. These industries, engaged in intense competition for top talent, recognize the value of a prestigious and well-appointed office environment as a key recruitment and retention tool.

➡️ Explore how premium office environments support high-value industries in The NYC Real Estate Market is Improving. Is Now the Time to Act?.

Intense Market Competition:

The competition for prime office space within the Midtown Core is exceptionally strong. In 2024, a record-breaking 133 leases were signed at rental rates exceeding $100 per square foot, highlighting the robust demand for these premier properties.

➡️ For insights into how Manhattan’s top-tier buildings are performing amidst strong demand, read The Strength of Manhattan’s “Better Buildings” in the Midtown Core.

Connect With Us:

For detailed information on the Midtown Core market or any other New York City submarket, please contact me for expert insights.

Paul Walker 212-984-7117 Paul.Walker@cbre.com