Silicon Valley and Manhattan Office Markets Show Signs of Recovery

The office markets in Silicon Valley and Manhattan are exhibiting notable recovery trends, reflecting a growing demand for quality office spaces in prime locations. According to The Registry, the Silicon Valley office market has shown significant recovery, with the second quarter of 2026 marking the seventh consecutive quarter of positive net absorption. Vacancy rates in the region have decreased to 15.2%, while leasing activity has reached its highest level since 2018, indicating robust demand for office space in this tech-centric area ⁴.

In Manhattan, the office leasing market is also experiencing a surge, particularly for Class A spaces in transit-accessible locations. Nutter's recent expansion to 11,438 square feet at 5 Grand Central East exemplifies this trend, as reported by ConnectCRE. This expansion reflects a growing demand for quality office space in prime locations, suggesting that businesses are increasingly prioritizing accessibility and amenities in their office choices ².

Meanwhile, Connecticut is witnessing significant changes in its office property landscape. CBRE's recent sale of two Class A office buildings totaling 511,318 square feet in Norwalk highlights a trend towards repurposing office properties. These buildings are set to be converted into residential units, reflecting a shift in the utilization of office spaces amid changing market demands ¹.

In San Jose, the office market is seeing an increase in sublease opportunities, with Google placing a 129,945-square-foot office building in its Brokaw Campus on the sublease market. This move indicates a potential increase in available sublease space in the area and suggests that companies are reassessing their office needs in the post-pandemic landscape ³.

Overall, these trends in Silicon Valley, Manhattan, and Connecticut illustrate a dynamic shift in the office market, driven by evolving corporate strategies and changing demands for office space. As companies continue to navigate the post-pandemic environment, the focus on quality and location is becoming increasingly evident in their leasing decisions.

Sources

1. ConnectCRE — Two Merritt 7 Office Properties Set for Residential Conversion
2. ConnectCRE — Law Firm Nutter Expands Tenancy at Durst’s 5 Grand Central East
3. The Registry (Bay Area) — Google Puts 129,945 SQFT of San Jose’s Brokaw Campus on the Sublease Market
4. The Registry (Bay Area) — Silicon Valley Office Recovery Deepens in 2Q26 as Vacancy Falls to 15.2% and Leasing Hits Seven-Year High