July 2025 Newsletter

Midtown Office Market Update | 

Every Building in Midtown has its own story.

On the same block, one landlord is carving up deep, base floors into smaller suites to attract tenants, while another is paying occupants to vacate, making way for larger, contiguous spaces. Ownership style of absentee vs. hands-on can make two near identical buildings feel worlds apart in tenant experience and deal flexibility.

Meanwhile, the much-hyped wave of office-to-resi conversions is already losing steam. Few buildings trade cheap enough to make it worthwhile, and most floorplates are inefficient or too costly to reconfigure. Sub-500K SF projects rarely pencil out, and the best candidates have already been converted. As rents creep higher and capital flows return, expect the “resi-conversion” conversation to go back on the shelf until the next downcycle.

Rents themselves are telling a new story. When I started in Midtown office leasing, you could count on one hand the buildings asking > $100 PSF.

Today, you need two hands to count the ones asking $200 PSF and the market is absorbing them. Trophy spaces are leasing briskly, but the surprise winner lately has been the loft market.

These boutique, amenity-lite, character-rich buildings are drawing strong demand from smaller firms seeking location and personality without Class A pricing. Landlords in this segment are winning deals with modest concessions and healthy returns.

Market-wide momentum is undeniable:

- asking rents are up 3.3% quarter-over-quarter

- availability is down to ~16% (lowest since 2020)

- Manhattan has logged five straight quarters of positive absorption.

Beyond the stats, there’s a noticeable shift in tone: lenders are re-engaging, distressed situations are being resolved, and capital is returning alongside tenant confidence.

Takeaway: Midtown isn’t just stabilizing, it’s resetting and tenants who expect more softness may be surprised. Whether you’re chasing a $200 PSF tower or a competitively priced loft, good space is moving.

The gap between proactive, invested landlords and “bare minimum” owners is widening, making choice of building and partner more important than ever.

Until next month,
Ben

Ben Blumenthal
Principal Broker | Noah & Co.

For the rest of our July 2025 Newsletter, click here.