Office tenants hoping for deals should avoid Midtown Manhattan for now.
According to the Commercial Observer, Midtown is the costliest office market in the U.S. and North America. Globally, it ranks third, behind London’s West End and Hong Kong—unchanged from the previous quarter, per Savills’ latest report.
Midtown Manhattan’s average net effective cost reached $206.67 per square foot, marking a 9% increase from the last quarter. This figure includes rent, incentives, and fit-out expenses. The report, however, did not specify how Savills defines the area.
While Midtown’s costs are steep, they still fall short of London’s West End, where occupants pay an average of $277.55 per square foot. Meanwhile, Hong Kong’s average cost dropped to $230.39 per square foot.
Downtown Manhattan placed fourth among the U.S.’s priciest markets, with average occupier costs of $91.88 per square foot. San Francisco and Century City in Los Angeles ranked between Midtown and Downtown
Savills found that almost half of the 35 global markets tracked experienced higher net effective costs, driven by rising rents and fit-out expenses. However, some markets saw cost declines and increased concessions.
Looking ahead, Savills Global Occupier Services CEO Rick Schuham expects continued rent and leasing volume growth throughout 2025, with net effective costs rising further.
