In a recent interview with Law360 Real Estate Authority, Blank Rome partner and Real Estate Industry team co-chair Massimo F. D'Angelo shared insights on the "amenity arms race" in Manhattan's office market, as AI companies, law firms, and other tenants move to amenity-rich Class A space to attract and keep talent, along with his views on interest rates, tariffs and force majeure, and office-to-residential conversions.
An excerpt of the article is copied below.
What is your thought on the latest news from the Fed, and what are you hearing from clients on that point?
Well, the hope was that they would come down, but obviously they're going in the other direction. That's caused, obviously, some trepidation. But listen, the New York City picture is a lot different than the national picture. Things are good in New York City, especially for the Class A buildings. I think that post-pandemic recalibration is still underway. The market is certainly in a period of price discovery and selective recovery rather than a broad-based growth. The transaction volume remains slightly below pre-pandemic highs.
And this is what you hit on. Elevated interest rates and tighter lending standards. So, you have a bifurcation between asset classes. Industrial and multifamily have really stabilized, and office still does remain under significant stress nationally. As I said, the picture in New York City is a lot, lot different. If you speak to any of the major commercial real estate brokers, major brokerage houses, they will tell you that Manhattan office leasing is gangbusters. The office leasing is hitting all-time highs in the first half of 2026, and in fact it's been the strongest performance in the first half since 2002. So year-to-date leasing, and my numbers go back to August, is a significant spike. If this pace holds, 2026 could be the strongest leasing year since 2000.
Vacancy is falling. Manhattan's availability rate dropped. It's been the lowest since September 2020. Same thing with downtown Manhattan's availability, that fell as well. The rents are rising. Average asking rents in Manhattan are significantly up — again, right around pre-pandemic levels when there was really a boom going on. Same is true for downtown. Not as high, but certainly up significantly. While nationally, the average is really at about the 2 percentile. So, not great. But again, this flight to quality persists. Class A space has accounted for the largest piece of the pie in the market year-to-date leasing, and the trophy and top tier properties certainly command premium rents and are tightening the fastest, while the Class B's and the Class C's of the world definitely are facing significant pressure.
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“AI, Law Firms Driving 'Amenity Arms Race' In NYC Real Estate,” by Andrew McIntyre was published in Law360 Real Estate Authority on September 23, 2026.