Goodwin Proctor, a law firm, is moving from the New York Times building on 8th Avenue to BXP 200 Fifth Avenue. At Flatiron, we frequently discuss the current commercial market.
The move scheduled for late 2026 signifies a modest short-term increase from 216,000 square feet to 250,000 square feet of previously utilized space, but the agreement includes options for potential building expansion. The firm’s relocation indicates a strong belief in the previously overlooked Midtown South area, highlighted by SL Green’s One Madison, which currently accommodates IBM and Franklin Templeton’s New York headquarters.
Welcome to the dynamic and growing Manhattan office market in 2025. While many old buildings and cautious lending practices remain, the situation is significantly improved compared to what was anticipated five years ago and even just two years ago.
A Newmark survey conducted this month revealed that Manhattan office recovery is “overlooking the national narrative.” This means that it outperformed other major US cities both in total volume and percentage change.
Reports from CBRE, Cushman & Wakefield, JLL, Newmark, Savills, Colliers, and Avison Young show slight variations, but the first quarter of 2024 marked the highest leasing activity since the fourth quarter of 2019.
The availability rate has decreased to approximately 17%, reaching its lowest point in five years. It fell below 15% in Prime Midtown and under 10% on Park Avenue.
All of the five largest leases in the first quarter surpassed 300,000 square feet. And – here’s the twist! – Physical office attendance continues to be considered the ultimate goal, even though many landlords assert that remote work is now “in the past,” yet attendance keeps rising. In New York City, office occupancy in March reached 76% of pre-pandemic levels, compared to 72% the previous year.
Nevertheless, it’s enlightening to reflect on how various media outlets perceived the Manhattan office market and the future of New York City during the five years since the pandemic’s impacts fully materialized.
The New York Times initially downplayed the challenges facing businesses it didn’t favor, stating on May 12, 2020:
The pandemic may have seemed “fundamentally different” (i.e., far worse) compared to earlier crises like the 1918-19 Spanish flu or 9/11. “Companies are exploring ways to safely bring back employees, questioning whether all staff need to return.”
By 2025, executives are bringing their teams back to shared desk spaces.
Yet, the Times once again pushed the “Ghost Town” narrative on September 8, 2020, stating the company showed “increased reluctance to commit to the city long-term.”
Just tell that to Citadel, Blackstone, Bloomberg, Alphabet, and Amazon. Their actions highlight a strong demand for more space here since the infamous lockdown ended in 2020.
In April 2023, amid an early sign of market recovery, the Times reported a “Gloomy outlook for Manhattan office space.”
The left has not only predicted a commercial decline. Peggy Noonan from the Wall Street Journal pointed out on February 25, 2021, under the upbeat title “Old New York won’t return” and remarked, “Midtown office buildings are vacant.” She added, “While people are gradually returning to office work,” vacant stores and office buildings near public transit haven’t rebounded.”
In truth, retail spaces at Sixth Avenue, Brookfield Place, Moynihan Train Hall, and Fulton Transit Center are filled with numerous new hotels and restaurants, including around WSJ and New York residences.
The nonprofit city’s report in May 2023 stated, “The city’s economy is on the mend. However, the office market is lagging.”
And who can overlook the “Doom Loop Cycle” of 2023? This well-cited article by a Columbia University academic claimed that remote work spelled a “real estate apocalypse” that would inevitably lead to the collapse of New York City’s Treasury Department.
Currently, we have a new concern: President Trump’s tariffs. There’s an expectation of distress regarding how this will affect New York City’s landlords, potentially leaving them in a worse position than they were five years ago.
Perhaps this will be the case. But let’s not rush to conclusions until things settle down – if recent history teaches us anything, it’s that this will likely happen sooner or later.
