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Weekly Market Report - February 10, 2026

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  • 10 min read

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Leasing dipped nearly 30 percent in seasonal slowdown


Manhattan's office market experienced a seasonal slowdown in January following a record December, with leasing activity totaling approximately 3.7 million square feet—down nearly 30 percent from December yet showing a slight year-over-year increase. This trend matched historical patterns, with January declines noted in six of the last ten years. Midtown dominated with the largest leases, including Gibson Dunn's 362,000-square-foot renewal at MetLife Building and C.V. Starr’s 274,000-square-foot lease at 343 Madison Avenue. Burlington Stores also extended its 206,000-square-foot space at 1400 Broadway.


The availability rate tightened to 13.5 percent, marking the 23rd month of stable or decreasing supply, while sublet supply fell for 16 months to 10.7 million square feet—a 38 percent decline from last year. Average asking rents rose to $77 per square foot, a 5 percent increase year-over-year but still 3 percent below March 2020 levels. Midtown represented 47 percent of January's leasing activity, nearing March 2020 availability rates, while Downtown sublet space also tightened, demonstrating resilience amidst slower leasing activity.


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Brookfield Properties has secured an $800 million mortgage for its headquarters at Brookfield Place, indicating a cautious stance from banks regarding large office loans. This new debt is $100 million less than the previous loan and has a shorter five-year term. The property was recently valued at $1.3 billion, down from $1.4 billion a decade ago. Brookfield is contributing $173 million in cash, contrasting with no reported down payment in its last refinancing in 2016. Stricter terms have emerged compared to a recent $900 million mortgage for another building, which had a significantly lower down payment.


Observers anticipate stagnant office employment growth in New York over the next few years, influenced by hiring slowdowns and AI efficiencies. Despite declining stock values for major real estate firms like SL Green and Vornado, industry experts assert a strong start to leasing in 2026. Brookfield, with a history in the Financial District, has invested heavily in upgrading its properties since acquiring them after the 9/11 attacks.


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Extell Development has secured an air rights deal for a proposed tower at 655 Madison Ave., paying approximately $39.9 million to the Metropolitan Club for 135,000 square feet of development rights. The transaction closed on January 29, 2024. Extell acquired the site for about $160 million and initially planned a 37-story mixed-use structure but now aims to rezone it for a 74-story tower totaling around 765,000 square feet with 154 residential units. The project will also involve upgrading the nearby subway station to incorporate an additional 130,000 square feet. Plans include 233,000 square feet of commercial space, with a completion target of 2031. The Metropolitan Club, established in 1891 and historically significant, remains a private luxury venue. Moreover, Extell is under contract to buy 123,000 square feet of air rights from St. Thomas Church for $36 million, and is pursuing another large project at 871 Seventh Ave.


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Westbrook Partners is selling Ritz-Carlton hotels in New York and Washington, driven by affluent consumer demand for luxury travel. The Ritz-Carlton New York, located on Central Park South, has been sold to Gencom. Meanwhile, Westbrook is close to finalizing a deal to sell the Ritz-Carlton Washington D.C. to Trinity Investments, with negotiation details remaining undisclosed. Gencom's founder, Karim Alibhai, noted the appeal of luxury assets in New York City. Luxury hotel chains performed well in 2025, with revenue per available room (revpar) rising by 5.1%, contrasting with a slight overall decline for U.S. hotels.


This acquisition marks Gencom's second New York property, following last year's purchase of the InterContinental New York Times Square. Trinity has also acquired prominent hotels like the Fairmont Olympic Hotel and the Kimpton Miralina Resort & Villas. Westbrook, which has invested $14 billion since its inception in 1994, has been active in selling properties, including a recent deal for the Four Seasons Hotels San Francisco reported in November.


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The Chrysler Building in Midtown has been without an owner since last spring, facing high costs and maintenance issues that complicate any potential sale. Tishman Speyer, a previous owner, is reportedly leading negotiations to regain ownership, but may have to make concessions regarding the ground lease held by Cooper Union. Constructed in 1930, the iconic 77-story building offers direct access to Grand Central. Tishman Speyer acquired it in 1997 for $220 million and sold parts of its stake over the years, with a 2008 transaction valuing it at $800 million. By 2019, ownership shifted to RFR and Signa Holding, at a drastically reduced value of $150 million, largely due to high ground lease costs.


The annual ground rent surged from $7.75 million to $32.5 million in 2018, with another expected increase to $41 million in 2028, complicating negotiations for Tishman Speyer’s return. The building's vacancy rate is at 14%, with tenants voicing concerns about maintenance issues like elevator outages and pest problems. Other firms like Savanna and SL Green have shown interest in the tower. Savills is facilitating negotiations, with expectations that the ground rent may be adjusted in light of the building's pressing repair needs and market conditions. Attention remains on the Chrysler Building as stakeholders navigate its future.


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Wharton Properties faces foreclosure on its Herald Square retail building at 11 W. 34th St., home to a Foot Locker storefront, due to a $24.3 million judgment. Financial issues emerged for Wharton as the commercial area struggled post-pandemic. Despite a peak 39% vacancy rate last year, improvements are visible in the region, particularly at Herald Towers, a mixed-use complex that has recently attracted national retailers like TJ Maxx and Old Navy, with several new leases signed. The revitalization follows years of vacancy, with retail spaces now leased by Moomoo and IT, replacing former tenants like Gap and Forever 21. Herald Towers has also secured $275 million in refinancing, which reflects the growing tenant activity. Meanwhile, residential units in the property are reportedly performing well, with competitive rental listings.


JEMB Realty, the owner of the Towers, bought it for $150 million in 1999, rebranding it and incorporating some rent-stabilized units. Despite the positive news, vacancies remain, illustrated by empty storefronts, including at Vornado’s properties. The upcoming auction of 11 W. 34th St. on Wednesday may lead to new ownership, possibly impacting the street's future dynamics, especially if it sells above the owed mortgage. Currently, 21% of storefronts on a key two-block stretch remain vacant, highlighting ongoing challenges despite emerging signs of recovery.


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Tishman Speyer is set to manage the Hippodrome, a historic office tower at 1120 Sixth Ave., as owners Edison Properties and Gottesman Real Estate Partners announced their selection of the developer. The 21-story tower, once a theater and transformed into 615,000 square feet of office space, is almost fully leased, with tenants including BBC America and the job-listing website Indeed. ElevatedNY, a coworking service occupying part of the building, will join Tishman Speyer's flexible office platform. While Tishman Speyer has no immediate major upgrade plans, conversations about the future are anticipated. The firm, led by CEO Rob Speyer, is also rumored to be pursuing a deal for the Chrysler Building in Manhattan, which it previously owned before selling its stake. Edison Properties oversees over 3 million square feet of real estate across multiple states, while Gottesman Real Estate Partners owns various properties in New York and North Carolina.


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Berndt Perl and Kenneth Aschendorf are facing foreclosure on their 200,000 square-foot tower at 25 W. 45th St., set for auction on Wednesday at the New York County Courthouse. This building defaulted on its mortgage early in 2024 after WeWork, its anchor tenant, filed for bankruptcy. Appraised at $55 million, it reflects a nearly 50% reduction from pre-pandemic values and is under a $63 million loan. Their firm, APF Properties, has other properties but stands to lose its second Midtown building in a year, following the foreclosure sale of a 110,000 square-foot building at 24 W. 57th St. Soloviev Group acquired that property for $67 million. The 45th Street building, purchased by APF in 1997, had a $70 million mortgage refinanced in 2013. As of October, it was nearly 40% vacant, underscoring ongoing struggles for older Class B office buildings.


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Manhattan's office market started strong in 2026, building on a record leasing year in 2025. Burlington Stores expanded its presence to over 206,000 square feet at 1400 Broadway, marking a significant growth from its initial 35,182-square-foot lease in 2010, with its latest expansion finalized in February 2024. This lease ranked as the third largest for January, following Gibson, Dunn & Crutcher and Starr. Overall, Manhattan leased about 3.7 million square feet in January, a decrease of nearly 30% from December, yet slightly surpassing the year-ago total.


The availability rate tightened to 13.5%, remaining unchanged for 23 consecutive months, despite nearly 72 million square feet being available. Average asking rent rose for the eighth consecutive month to $77 per square foot, still below pre-COVID levels. Midtown remained the busiest area, with activities slightly exceeding 1.7 million square feet and the availability rate falling to 12.5%. In contrast, Downtown experienced a sharp drop to 280,000 square feet leased, though its availability rate decreased to 16.3%, and average rent increased to $60.75 per square foot.


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In 2026, Manhattan's SoHo/NoHo neighborhoods witness significant real estate activity. ZG Capital Partners acquired the mixed-use building at 680 Broadway within the NoHo Historic District for nearly $11 million, marking a continuation of investment sales as developers aim to leverage the area's robust residential and retail markets. The historic property, dating back to 1860 and recently renovated in 2021, offers around 14,000 square feet with two retail spaces and four fully-occupied market-rate residential units. James Tamborlane of ZG Capital Partners emphasized the long-term potential of the building due to its desirable location and quality of residential units, planning further renovations to enhance housing appeal.


Although the site is within a city-rezoned area aimed at increasing housing, this aspect did not influence the purchase decision. The building had previously been off-market from September 2023 to July 2025, with rents ranging between $7,000 and $8,800. Current retailers include Eyes on Broadway and Michael Andrews Bespoke. The property was previously owned by Tri-Star Equities, who sold it at a slight loss. Recent activity in SoHo/NoHo also includes sales by JSRE and Icon Realty Management, reflecting ongoing investment interests in the neighborhoods.


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Bank tacks on 139K sf at Midtown West offices


Manhattan office landlords concerned about losing JPMorgan Chase leases due to its new 270 Park Avenue headquarters need not panic just yet. In the fourth quarter, JPMorgan expanded its space at Brookfield’s 5 Manhattan West by 139,000 square feet, now totaling 565,000 square feet in that building. Specifics about the deal, such as duration and rent, were not disclosed; the average asking rent in Midtown was $84.24 per square foot. Additionally, JPMorgan increased its footprint at L&L Holding Company's 390 Madison Avenue by 60,000 square feet, bringing its total there to nearly 500,000 square feet.


This expansion contrasts with the recent opening of its 2.5 million-square-foot headquarters designed for about 10,000 employees. JPMorgan also owns a nearby building, creating a JPMorgan-centric neighborhood. Meanwhile, the bank is renovating the former Bear Stearns building at 383 Madison Avenue for $1 billion and has renewed its lease for 270,000 square feet at 237 Park Avenue. Other tenants at 5 Manhattan West include Noom and Whole Foods, showcasing a diverse commercial presence.


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In Manhattan's Garment District, an office building at 254 W. 35th St. has changed ownership for the second time in just over a year, with Brooklyn's Joyland Management purchasing it from Cayre Equities for approximately $26.2 million. Cayre Equities acquired the property in late November 2024 for about $16.2 million, yielding a swift profit of $10 million. Initially, Cayre had intended to convert the site into a storage facility. However, Joyland aims to transform the 16-story building into a residential property, proposing a project with 166 apartment units, including affordable housing.


Plans were filed with the Department of Buildings in January, and the sale was completed on February 2. The area was rezoned by the City Council in August to facilitate the development of new housing, potentially influencing Joyland's strategy for the site. This move adds to Joyland's busy real estate portfolio, as the firm recently acquired the site of a stalled hotel project on 159 Broadway in Williamsburg, planning to develop a 99-unit residential building. Additionally, Joyland sold a Gowanus apartment building for $105 million and purchased other properties near Union Square, aiming for a total of 96 residential units.


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Large deals like this one drove leasing activity in January over 2 million square feet for the seventh consecutive month


The Bank of Montreal has subleased 82,422 square feet at The Durst Organization’s 151 West 42nd Street, according to a CBRE report on Manhattan office figures. Details about the lease signing date and sublandlord remain unclear. The major Canadian bank previously occupied over 200,000 square feet in the building since 2019. Brokers for the property include Rocco Romeo, Thomas Bow, and Nora Caliban from Durst, who did not comment on the situation.


The rental rate and lease length were undisclosed, though Midtown’s average asking rent stood at $85.08 per square foot as per. Additionally, other notable January leases included J.P. Morgan Chase's 139,332-square-foot expansion at Five Manhattan West, Datasite's 75,836-square-foot lease at 3 Columbus Circle, Centerbridge Capital Partners' 75,826-square-foot deal at 345 Park Avenue, and Withum's 57,004-square-foot lease at 1411 Broadway. Manhattan’s January leasing activity surpassed 2 million square feet, and the office availability rate was 15.5 percent, reflecting a year-over-year decrease.


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Zelig Weiss has acquired a development site in Gowanus, Brooklyn, for $19 million. Plans for the site at 444 Carroll St. include constructing a six-story, mixed-use building featuring 99 residential units and approximately 3,000 square feet of commercial space, along with 2,500 square feet of waterfront public access. Weiss has previously invested in Gowanus, purchasing 224 Third Ave. for $17.8 million, intending to build an 11-story structure. D'Angelo noted significant shifts in neighborhood dynamics have inflated property values. This transaction aligns with a broader trend following Gowanus' 2021 rezoning, which is expected to yield around 8,000 new housing units, while Weiss strategically aims to build b 


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Mayor Zohran Mamdani announced the reopening of the cupola at the David N. Dinkins Manhattan Municipal Building after a $6 million renovation, providing 360-degree views of the city. Located at 1 Centre St., the cupola will offer free guided tours starting in June, aimed at enhancing public access. Mamdani tied this reopening to the celebration of Dinkins, the city's first Black mayor, as part of Black History Month. The renovation includes repainting, repairing the rotunda, adding glass barriers, and restoring this civic space. The initiative reflects efforts to improve public access to city landmarks, with DCAS Commissioner Yume Kitasei emphasizing its importance in municipal government. The building houses various city agencies and officials, reinforcing its role in civic life.

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