Market Intelligence · Q1 2026
A curated look at office and retail market conditions across Manhattan and Brooklyn — updated quarterly.
Data sourced from Q1 2026 broker research reports · Updated May 2026
Q1 2026 Snapshot
New York City's commercial real estate market posted exceptional first-quarter results. Manhattan's total leasing — including renewals — hit a historic high of 13.2 million square feet, driven by landmark commitments from Bank of America and American Express. Availability continued its downward trajectory for the ninth consecutive quarter, and retail reached a record-low vacancy citywide.
Market data is derived from Q1 2026 broker research reports published by Cushman & Wakefield, CBRE, and Cresa. Figures may vary by methodology, building class coverage, and whether sublease space is included. All statistics are for informational purposes only and do not constitute investment or leasing advice. Information is subject to change.
By Market & Property Type
Manhattan office leads the recovery while retail hits historic lows. Brooklyn offers a compelling alternative for cost-conscious tenants willing to trade address for value.
Manhattan posted its strongest Q1 leasing performance since 2011, with total activity — including renewals — reaching a historic 13.2 million square feet. Availability fell for the ninth consecutive quarter to 15.1%, the lowest level since late 2020. Sublease supply declined sharply, from 17.9 MSF a year ago to 12.7 MSF, signaling improved confidence from occupiers.
Midtown remains the tightest and most expensive submarket, anchored by Class A demand from financial services and legal tenants. Midtown South — favored by TAMI sector firms — is recovering, while Downtown is seeing a surge driven by the American Express headquarters commitment at Two World Trade Center.
| Submarket | Avg Asking Rent | Class A Asking |
|---|---|---|
| Park Avenue | $111.97 | $111.97 |
| Penn Station / Hudson Yards | $105.81 | $125.96 |
| Madison / Fifth Ave | $103.95 | $118.04 |
| Sixth Ave / Rock Center | $94.53 | $96.17 |
| Midtown South (overall) | $80.94 | $104.38 |
| Grand Central | $69.93 | $74.18 |
| World Trade Center | $69.04 | $71.81 |
| Downtown (overall) | $56.67 | $61.77 |
Full-service asking rents per SF/year. Source: Cushman & Wakefield, Cresa, CBRE Q1 2026. Ranges vary by building class and methodology.
Brooklyn's office market continued its recovery in Q1 2026, with overall vacancy declining for the fourth consecutive quarter to 21.2% — down 360 basis points year-over-year. Coastal Brooklyn recorded the largest improvement, while Downtown Brooklyn accounted for nearly half of total leasing volume despite representing less than a fifth of transactions.
Class A space captured the majority of square footage leased, while Class B buildings recorded nearly twice the transaction count — reflecting strong appetite from smaller tenants seeking flexible terms. Two consecutive quarters of positive absorption signal a genuine tightening of conditions, particularly in well-located buildings along the waterfront and in Borough Hall.
| Submarket | Avg Asking (All) | Class A Asking |
|---|---|---|
| Downtown Brooklyn | $57.19 | $60.43 |
| Coastal Brooklyn | $49.52 | $54.74 |
| Northern Brooklyn | $41.95 | $48.57 |
| Brooklyn Overall | $52.59 | $57.26 |
Full-service asking rents per SF/year. Source: Cushman & Wakefield Q1 2026. Brooklyn rents run roughly 30–35% below comparable Manhattan submarkets, making the borough an attractive alternative for cost-conscious tenants.
Notable Q1 Transactions
Arizona College of Nursing — 39,063 SF at 532 Fulton St (Borough Hall)
Mindspace — 11,590 SF expansion at 25 Kent Ave (Williamsburg)
Think! Architecture + Design — 6,159 SF at 45 Main St (DUMBO)
Manhattan retail reached a record-low overall availability of 10.8% in Q1 2026, down 2.7 percentage points year-over-year. Every prime corridor recorded a contraction in available space. The rebound is broad-based — supported by 65 million annual visitors, record office absorption increasing foot traffic, and rising median household incomes ($111,200, up 3.2% YOY).
Food and beverage concepts led deal volume at 29.7% of transactions. SoHo captured 30.9% of quarterly leasing by square footage. Upper Madison Avenue — newly designated as its own corridor in 2026 — posted the lowest availability rate in Manhattan at just 3.4%. Health and wellness concepts are surging, with rolling four-quarter activity up 69.6% year-over-year.
| Corridor | Asking Rent/SF/Yr | Availability |
|---|---|---|
| Upper Fifth Ave (49th–60th) | $2,447 | 14.5% |
| Times Square Bowtie | $1,501 | 15.8% |
| Madison Ave (57th–72nd) | $881 | 10.5% |
| Upper Madison (72nd–86th) | $697 | 3.4% |
| Fifth Ave (42nd–49th) | $633 | 11.1% |
| Herald Square / W. 34th | $503 | 32.2% |
| Flatiron / Union Sq West | $329 | 11.0% |
| SoHo | $374 | 9.6% |
| Lower Manhattan | $204 | 15.1% |
Gross asking rents per SF/year. Source: Cushman & Wakefield Q1 2026. Retail rents vary significantly by block, floor, and visibility. Off-market transactions are common in the most competitive corridors.
Key Submarkets
Office and retail activity is spread across distinct corridors in Manhattan and Brooklyn, each with its own rent profile, tenant mix, and demand drivers.
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