Manhattan leads U.S. office demand and real estate recovery

Manhattan has emerged as the U.S. metro area with the highest office demand, according to a September 2026 report by Highland Cabinetry. The borough maintains the lowest office vacancy rate in the country at 13.1%, a decrease of 2.1% over the last 12 months. This demand is driven by a trend where 90% of employers require at least three in-office days per week.

An Emerging Trends in Real Estate 2026 report by the Urban Land Institute and PwC also highlights Manhattan as a top market to watch, ranking 7th overall. The report notes a diversified recovery across the office, retail, and tourism sectors. A significant driver of recent leasing activity has been artificial intelligence companies, which accounted for 2.8 million square feet of leasing in 2026.

Other notable trends include approximately 6 million square feet of planned office-to-residential conversion projects starting next year. In other metro areas, Miami is leading in new office construction, while Orlando has seen the highest growth in office-using jobs at 15.7%.