NYC's Office Market rebounds in 2024

New York City's (NYC) office market rebounded in 2024, showcasing a recovery driven by evolving work patterns and a growing demand for high-quality, adaptable workspaces. This resurgence is attributed to the widespread adoption of hybrid work models, where employees divide their time between traditional and remote office settings.

The coworking sector across the United States (US) experienced substantial growth in 2024. According to reports from Cushman & Wakefield and CoworkingCafe, the total number of coworking spaces increased by 22% by the third quarter, reaching 7,695 nationwide.

Manhattan remains the country's leading coworking market, boasting 273 locations and 11.27 million square feet of flexible office space. While Manhattan thrived, Brooklyn saw an 8% decline in its coworking square footage, suggesting regional variations in the market's dynamics.

According to Colliers, nearly 5 million square feet of older office space in Manhattan were repurposed for residential use in 2024 as part of a strategic move to address the evolving market. This initiative helped to tighten the overall supply of office space and adapt to changing demands. Furthermore, many landlords began offering flexible office solutions directly to attract tenants, demonstrating a willingness to adapt and innovate.

Hybrid work has become the dominant strategy for businesses, with 92% of surveyed CBRE clients adopting this model in 2024. Manhattan's office attendance reached 56% of average weekdays by May 2024, approaching 72% of pre-pandemic levels, according to data from NY Weekly and Trepp.

Notably, midweek attendance remained powerful, highlighting the continued importance of in-person collaboration. The "flight-to-quality" trend also persisted, with high demand for newer, premium office properties, especially trophy buildings that saw visitation levels nearing 2019 figures. Financial services firms drove a significant portion (31.1%) of new Manhattan leases over 10,000 square feet.

Manhattan's overall office vacancy rate stabilized in the fourth quarter of 2024. Reports from Cushman & Wakefield (23.3%) and Colliers (16.5%) showed some variations, but both indicated a leveling off.

Moody's also noted a decline in the New York metro's office vacancy rate, reaching 12.7% by the first quarter of 2025. Manhattan's office leasing volume between 23.4 million and 37 million square feet in 2024 marked its strongest year in five.