The Manhattan office sector experienced significant growth in investment sales during 2025, with transaction volumes rising over 26% from the previous year to reach $11 billion, according to JLL. This increase reflects a resurgence of investor confidence that had waned during the pandemic.
A notable highlight was the acquisition of 590 Madison Avenue for $1.08 billion by RXR and Elliott Investment Management, marking the highest price for an office tower in over three years. JLL’s team described this uptick as a pivotal moment for investors, with many now “diving back in” rather than merely exploring options.
Conversion projects from office to residential spaces are also on the rise, particularly in downtown Manhattan, with over 75 projects being evaluated or under construction. These conversions represent around 7.1% of the city’s total office inventory, equating to approximately 34 million square feet.
In retail, the Union Square area is witnessing a notable turnaround, with storefront occupancy climbing to 91% in the fourth quarter of 2025 compared to 85% a year prior. Sixteen new businesses, including national retailers like Aritzia and Ulta Beauty, opened in this period, contributing to a revitalized commercial landscape.
Alongside these developments, Purple, a lifestyle public relations agency, announced its move to a new location at 16 Madison Square West, expanding its footprint to 24,000 square feet. This move aligns with the company’s strategy to support growth while enhancing its operational identity in Manhattan.
Why this story matters
- Highlights the recovery and growth of Manhattan’s office and retail sectors, signaling renewed investor and consumer confidence.
Key takeaway
- The substantial increase in investment activity in 2025 underscores a broader trend of adaptability in real estate, including the shift towards office to residential conversions.
Opposing viewpoint
- Some analysts remain cautious, citing ongoing economic uncertainty that could still impact future investment decisions.
