Manhattan Office Sector Leads in Sales Volume as Prices Dip

At the end of 2024, the biggest office metro in the country continued to struggle with new supply, while investment activity picked up pace since 2023, according to CommercialEdge data. Manhattan transaction trends are similar to the sector’s performance on a national level.

Considering the evolution of return-to-office policies, rising maturing debt and high construction costs, the metro showed mixed signals. The borough’s total sales volume for 2024 was the largest in the country and marked a 76 percent year-over-year increase. However, with the increase in discount deals, the average sale price per square foot dipped to $363.62 per square foot.

Manhattan office sales prices dip

In 2024, 11.3 million square feet of office space across 47 properties changed ownership in Manhattan, adding up to a total volume of $4.1 billion. Last year’s investment volume marked a 76 percent jump, compared to 2023’s total. Among gateway markets, Manhattan kept its leading position, followed by Washington, D.C., with $3 billion in deals, and Los Angeles, with $2.1 billion.

Investor appetite in the borough increased consistently throughout last year—from the $99.2 million recorded at the end of the first quarter, to the fourth quarter’s $1.4 billion. One of Manhattan’s biggest transactions last year was Bloomberg Philanthropies’ $560 million acquisition of 980 Madison Ave. The company picked up the 118,635-square-foot asset in June after the seller, RFR Realty, defaulted on a $197.6 million loan.

Office assets in the metro traded at an average sale price of $363.62 per square foot—significantly above the national average of $171.61 per square foot, but much lower than in 2023. Manhattan registered the second-highest prices among gateway cities, with Miami emerging as the most expensive metro in the U.S., at $395.24 per square foot. San Francisco came in third, with $345.22 per square foot.

Since the start of 2025, eight properties amounting to approximately 3 million square feet traded in the metro. The sales volume added up to $1.4 billion, at an average of $462.05 per square foot. The biggest transaction so far this year was Haddad Brands’ $357 million acquisition of Two Park Avenue in NoMad. Morgan Stanley sold the 1.1 million-square-foot high-rise.

A steady pipeline with large projects

As of December, Manhattan’s under-construction pipeline included 2.7 million square feet of competitive space, representing 0.6 percent of existing stock—lower than the national average of 0.8 percent. Among gateway markets, Boston led with 3.4 percent, followed by San Francisco’s 2.3 percent.

In terms of underway stock, Manhattan placed sixth in the nation. Across similar markets, Boston led the rankings with 8.7 million square feet, followed by San Francisco (3.8 million square feet) and Dallas (2.9 million square feet), while the borough outperformed Los Angeles and Miami, with 1.9 million square feet ad 1.8 million square feet, respectively.

The list of significant office projects underway remained unchanged since our last update. The largest project under construction is the upcoming global headquarters of JPMorgan Chase, at 270 Park Ave. in the Plaza District. The company broke ground on the 2.5 million-square-foot, Class A+ office tower in 2020, with estimated completion by the end of August 2025.

Construction starts crash

At the end of 2024, developers delivered 1.4 million square feet across four properties in Manhattan, representing 0.3 percent of existing stock and reflecting a 75.7 percent year-over-year drop. Among gateway markets, Boston topped the charts with 6.7 million square feet completed, marking a 27.3 percent annual increase, while most similar markets registered notable declines, including Washington, D.C.’s 50 percent dip.

Notably, The Walt Disney Co.’s New York new headquarters dubbed 7 Hudson Square, came online last year. Totaling 1.3 million square feet, this property was completed in August 2024, with Silverstein Properties as developer.

Meanwhile, only two projects broke ground in the borough, comprising 356,000 square feet and marking a massive 594 percent year-over-year decline. When adding projects in planning stages to the relative-to-total-stock pipeline, the figure reached 3 percent—just north of to the national average of 2.9 percent and on par with Los Angeles.

Manhattan rents decreased in 2024

As of December, Manhattan’s office vacancy rate stood at 16.6 percent—below the national figure of 19.8 percent and up 20 basis points year-over-year. The borough’s rate was lower than in Boston (17 percent) and Washington, D.C. (18.5 percent). Miami posted the lowest office vacancy in the nation at 15.2 percent, while San Francisco’s 28.8 percent was on the other side of the spectrum.

Since our previous update, Manhattan fell from its leading position as the priciest metro for office leasing. As of December, asking rents averaged $68.42 per square foot—still more than double the national average of $33.11 per square foot. San Francisco’s $70.56 per square foot took the lead.

One of the largest leases of 2024 was Bloomberg’s 924,876-square-foot renewal and expansion at 919 Third Ave.

Office-to-residential policies in NYC

According to CBiz, the value of office spaces in New York City dropped by 40 percent since the pandemic, while one in five buildings vacant.

In early December 2024, the City Council adopted the City of Yes Housing Opportunity, enabling owners with underutilized office assets built between 1961 and 1991 to convert them to residential buildings with multiple types of housing, according to the city’s website.

Introduced in 2023, the Office Conversion Accelerator Program is another option, assisting landlords in conversion projects designed to generate a minimum of 50 residential units. Additionally, the state also launched two new exemption programs for the 2025 fiscal year, offering tax incentives to developers that propose conversions with at least 25 percent in affordable housing units.

CommercialEdge’s Conversion Feasibility Index, a tool launched earlier last year, helps evaluate a building’s potential for residential repurposing. At the start of this year, Manhattan had 907 buildings with a CFI score between 90 and 100, placing them in the Tier I category.

In June last year, Sunlight Development purchased an office building at 95 Madison Ave., also known as the Emmett Building, with plans to convert it into a 70-unit residential building. The developer paid $65 million for the 141,161-square-foot, Class B office asset, and secured a $20 million loan held by Bank Hapoalim. This 16-story, historic building holds a CFI score of 93, CommercialEdge shows.

Coworking constantly improves

The coworking sector expanded in Manhattan through 2024, its 285 locations totaling 11.6 million square feet remaining the largest inventory in the country. The borough's flex office supply saw a notable increase from the 9.5 million square feet recorded at the end of 2023.

Other markets with large coworking inventories included Chicago (7.1 million square feet), Los Angeles (6.5 million square feet) and Dallas (5.2 million square feet). Manhattan’s share of flex space as percentage of total leasable office space stood at 2.3 percent—above the national figure of 2 percent. Among gateway markets, Miami led the ranking with a 3.8 percent figure.

At the end of last year, WeWork remained the flex office provider with the largest footprint in Manhattan, with operations totaling 2.6 million square feet across 29 locations. Industrious (1.5 million square feet), Regus (697,950 square feet), Convene (603,800 square feet) and Spaces (567,000 square feet) also maintained a strong presences in the borough.