Major Manhattan office-building owners have seen significant drops in their stock prices this year, despite data showing recent improvements in office leasing and occupancy. According to a report from Crain’s New York Business, the stock price of the largest office owner in Manhattan has fallen roughly 35% in 2025.
This decline comes even though leasing activity in parts of Manhattan has rebounded. Recent market reports show an overall availability rate of about 16.4 percent for Manhattan offices in the second quarter of 2025, the lowest rate in over four years.
Rising Costs of Amenities Eat Into Landlord Returns
Part of the problem for landlords lies in the high expenses tied to upgrading and maintaining office buildings. Many owners invested heavily in building amenities, from modern common areas to upgraded systems, in hopes of attracting tenants back to the office.
However, these upgrades appear to be carrying high costs, and for many landlords, they are not offset by rental revenue fast enough. As a result, despite stable or rising demand for space, shareholders are seeing weaker returns, which is reflected in declining stock valuations.
Market-Wide Trends Add Pressure on Office Values
The struggles of Manhattan firms are part of a broader trend across the U.S. commercial real estate market. According to a recent report, national office vacancy rates remain elevated, placing long-term pressure on landlords and lending institutions.
Furthermore, research from a leading global firm projects that by 2030, demand for traditional office space in major urban centers, including New York City, may remain historically lower than pre-pandemic levels.
What This Means for Investors, Tenants, and the City
For investors, the current market illustrates the risks of over-investment in amenities when underlying demand remains uncertain. Even well-maintained “Class A” buildings may offer shrinking returns if rental rates fail to rise enough to cover increased overhead and operating costs.
For tenants and companies looking for office space, some landlords may begin offering more concessions or relocating tenants to buildings with lower overhead, as owners attempt to stabilize cash flows.
For the city and policymakers, sustained pressure on office landlords may have wider economic implications. Declining property values and shrinking tax bases, especially if offices continue to underperform, could affect municipal revenues and the funding of public services.
Could There Be a Turnaround? The Outlook Is Mixed
Some analysts believe the office market may stabilize if landlords reassess investment strategies, favor practical renovations over luxury amenities, and adapt to hybrid-work patterns.
Others caution that structural changes, such as remote work becoming more permanent, may continue to depress demand for traditional office space. For those building owners who cannot adjust cost structures quickly, the financial pressure may persist.
