The Flight to Quality: Why Tenants Are Choosing Better Office Buildings in Manhattan
What Is the “Flight to Quality” in Office Real Estate?
In the Manhattan office market, the “flight to quality” refers to a significant shift in tenant behavior: businesses of all sizes are choosing newer, high-end office buildings with premium amenities and better locations, even as overall leasing demand remains below pre-pandemic levels. This trend reflects a clear tenant priority: workplaces that attract talent, impress clients, and support hybrid collaboration. Rather than chasing the lowest rent, companies are now pursuing value in experience, design, and function—even if that means paying more per square foot.
Who Is Leading the Shift in the Flight to Quality?
The flight to quality is being driven by mid-sized and enterprise-level tenants with healthy balance sheets. Law firms, financial service providers, venture-backed startups, media companies, and healthcare providers are actively “trading up”—moving from dated buildings to trophy towers or fully renovated Class A properties.
But it’s not just Fortune 500 firms. Many smaller businesses and boutique tenants are joining this movement thanks to favorable lease terms in today’s tenant-friendly market. With landlords offering free rent, generous improvement allowances, and flexible commitments, even companies with modest footprints can now consider offices that were once out of reach.
When Did This Trend Begin?
The flight to quality began gaining traction in the post-2020 recovery phase, but it intensified in 2023 and 2024. As return-to-office policies solidified and companies began rethinking their long-term workplace strategy, decision-makers stopped renewing leases in older, underwhelming buildings and started looking for space that supports recruitment, retention, and culture.
By late 2024, Manhattan’s trophy office towers had recovered to 86% of pre-pandemic foot traffic, while older Class B/C buildings lagged significantly. Even with a flood of new high-end supply, the total occupied square footage in Class A and 5-star buildings grew by over 6.6 million square feet between 2020 and 2024—clear evidence of strong tenant migration upward.
Where Is This Happening?
The flight to quality is most visible in Midtown and Hudson Yards, where new skyscrapers like One Vanderbilt, Two Manhattan West, and The Spiral have attracted high-profile tenants with cutting-edge amenities, energy-efficient designs, and unbeatable transit access. But the trend spans the city:
- Downtown is seeing renewed interest in repositioned buildings along Broadway and Wall Street.
- NoMad and Flatiron are competing with boutique, amenitized Class A offices tailored to creative and tech firms.
- SoHo and Hudson Square are drawing design-forward companies to renovated loft offices with style and substance.
Across Manhattan, even legacy landlords of Class B buildings are investing in lobbies, pantries, wellness centers, and outdoor terraces to stay relevant.
Why Is This Happening Now?
Several factors are converging to drive the flight to quality:
- Workplace Strategy Has Changed: Post-pandemic, the office must be a destination—not an obligation. Employers are choosing buildings that help bring teams together and enhance company culture.
- Talent Expectations Are Higher: Employees are less likely to return to outdated, uninspiring office spaces. Natural light, fresh air, lounges, cafes, and quiet rooms have gone from nice-to-have to must-have.
- Concessions Have Closed the Cost Gap: Class A and even trophy space is more attainable than ever. With extended free rent, high TI packages, and flexible terms, tenants can move into premium buildings at effective rents that are surprisingly close to Class B pricing.
- Risk of Obsolescence Is Real: Buildings that don’t upgrade risk permanent vacancy or conversion into residential use. Tenants are aware of this and prefer buildings with long-term viability.
How Can Tenants Take Advantage of the Flight to Quality?
For office tenants currently in Class B or C space—or those whose leases are expiring in the next 12–24 months—now is the time to explore a move up.
Here’s how to capitalize on the trend:
- Benchmark Your Lease: Compare your current rent and terms to current Class A opportunities. You may be surprised by what’s now affordable.
- Leverage Market Conditions: Negotiate aggressively. Many landlords are eager to fill vacancies and will compete for your tenancy.
- Focus on Flexibility: Ask about early termination rights, expansion options, and modular build-outs.
- Tour Actively: Don’t rely on photos or marketing. Seeing and feeling the space is crucial when evaluating quality.
- Use a Tenant Representative: A broker who works for tenants only (not landlords) can uncover off-market deals and negotiate more favorable terms.
Some Names who made the Move
🏢 Deloitte – 800,000 sq ft at 70 Hudson Yards
- Who: Deloitte (North America HQ)
- What: Signed one of the largest post-COVID office leases — 800,000 sq ft in the new 70 Hudson Yards tower.
- Where: Hudson Yards, Manhattan West Side
- When: Lease signed in April 2025, even before construction began
- Why: To secure premier new tower with top-tier amenities (outdoor space, podcast studio, red-eye suites, climate-control systems)—a clear “flight to quality” move
- How: Tenant signed pre-construction to lock in prime space, showcasing confidence in high-end assets
🏙️ WeWork – 60,000 sq ft at 250 Broadway
- Who: WeWork
- What: Leased 60,000 sq ft across five floors to open a new coworking flagship
- Where: 250 Broadway, Downtown Manhattan
- When: Deal announced July 7, 2025
- Why: To offer elevated, design-driven flexible workspace in a landmark tower—catering to tenants demanding amenities and image
- How: Partnered with AmTrust RE; lease reflects broader demand for premium flexible office product
🏢 Southern Land Co. – 13,000 sq ft at 99 Park Avenue
- Who: Southern Land Co.
- What: Took 13,000 sq ft in the newly renovated Class A 99 Park Avenue
- Where: Midtown Murray Hill
- When: Lease signed June 2025
- Why: Drawn by $30 M repositioning with new lobby, speakeasy lounge, golf simulator, and amenity center
- How: Tenant traded up from older space, leveraging enhanced amenity offering
Why These Deals Matter
| Insight | Context |
|---|---|
| High-profile tenants preferring Class A | Deloitte and Southern Land moved into top-tier, amenity-rich buildings. These aren’t bargain leases—they’re strategic upgrades. |
| Pre-leasing of new construction | Deloitte’s lease before completion shows confidence in premium new supply and demand certainty. |
| Flexible product carrying quality | WeWork chooses city center, landmark space to serve discerning clients—adding to the “flight to quality” in flexible leasing. |
Final Takeaway: The Opportunity Window Is Now
The Manhattan office market is at a unique crossroads. While overall demand has cooled, competition is fierce at the top of the market—and landlords are willing to make deals. For tenants who prioritize quality, culture, and growth, this is a rare moment to step into a better building without paying a premium.
If you’re thinking about your next move, evaluating your lease, or simply curious what “better” looks like—we’re here to help. No fees, no pressure, just smart strategy for office tenants in NYC.
Fill out our online form or give us a call today 212-967-2061 — let’s find the options for your business.
