What’s Happening in Downtown Office Leasing Market – Q1 2025

Downtown office leasing demand rebounded sharply in Q1 2025 with 1.42 million sq. ft of activity—nearly a four-fold increase from the prior quarter and more than double the five-year quarterly average of 674,000 sq. ft. While much of this activity emanated from Jane Street’s nearly 1 mil SF leasing transaction at 250 Vesey Street, downtown also tallied two additional deals larger than 90,000 sq. ft. These were Arup Services at 140 Broadway and Axesome Therapeutics at 1 World Trade Center. Another statistic of note is 54% of Downtown’s Q1 leasing activity was in blocks 50,000 sq. ft. or larger. Aside from these large deals, leasing remains slightly challenged in terms of the number of overall transactions.
Relocations into Downtown from other Manhattan markets—which drove activity from 2015-2019—remained depressed with only 41,000 sq. ft. of such transactions in Q1. This is largely to do with the post-covid desire to be close to the Midtown transit hubs.
Renewal activity reached 520,000 sq. ft. in Q1, already exceeding 2024’s full-year renewal total of 239,000 sq. ft. While Q1 2025 recorded a surge in demand and 567,000 sq. ft. of positive absorption, supply in Downtown remains elevated with an availability rate at 20.6%. Sublease space totaled 4.52 million sq. ft., representing 26% of all available space Downtown. The average asking rent Downtown was $57.08 per sq. ft., virtually unchanged from the prior quarter and year-over-year
Downtown’s taking rent index increased by 370 bps from the prior quarter to 90.6%, hitting its highest quarterly level since Q4 2022 but still below the 93.2% seen before the pandemic downturn. (This means that the average deal rent is approximately 10% less than the asking rent)
No large-scale office projects are under construction in Downtown. Two World Trade Center, a 2.80 million sq. ft. proposed development, remains the most noteworthy Downtown project potentially on the horizon.

If you require more detailed information on the Downtown market or have a space requirement you want to discuss, please feel free to contact me.
Paul Walker
212-984-7117
Paul.Walker@cbre.com