When Ken Podziba, chief executive of Bike New York, was searching for office space, his priorities were a good deal near public transportation and a building where his employees could take their bikes upstairs if they cycled to work.
“We don’t care about the amenities,” said Podziba, whose non-profit organisation teaches cycling and plans group rides, including the annual TD Five Boro Bike Tour. “It doesn’t matter to us at all if a building has a pool table or fancy food.”
Podziba looked at two dozen spaces before deciding on a nine-storey building constructed in 1922 on East 45th Street, steps from Grand Central Terminal. There is no door attendant, and the view – of other buildings – is not glamorous. Amenities? The Irish pub MJ Smith’s on the ground floor.
But the space, which rented for about $9,000 a month, had 232sq m (2,500sq ft). Since the staff of 15 moved there in late 2023, they’ve added an under-desk exercise bike as well as a trainer, a stand on which a bike can be mounted so employees can pedal while they work.
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“I love this space,” Podziba said. “It just feels like Bike New York.”
Podziba’s organisation is one of many that are helping to revive demand in Class B buildings, older properties with limited services that seemed all but doomed just a few years ago when the coronavirus pandemic sent workers home and remote working arrangements persisted. (Podziba’s broker, Stephen Powers, a founder of OPEN Impact Real Estate, rated the building a “C-plus or B-minus” in a phone interview.)
The fortunes of Class B buildings, which make up over 35 per cent of Manhattan’s office total, started to show signs of turning around in the first half of 2025. Nearly 45 per cent of Manhattan’s office leasing in the second quarter was Class B or Class C, up from 35 per cent last year, according to data from Savills, a commercial real estate brokerage.
One property owner and manager, Adams & Co, said the vacancy rate for its Manhattan portfolio of mostly Class B buildings fell to 3 per cent, from 16 per cent during the pandemic, with many buildings now 100 per cent leased.
That’s a big improvement, even as much of the leasing action continues to take place in new amenities-filled “trophy” properties. In the years after the pandemic, prospective tenants raced to land the shiny spaces, with their golf simulators and wellness suites, hoping they were enticing enough to lure workers back to the office; real estate experts have called the trend a “flight to quality”.
Trophy buildings make up about 11 per cent of office space in Manhattan, and the class A buildings that are still high-end but may be slightly older and have fewer amenities make up about 50 per cent, according to CoStar, a real estate services company. (The rating system is highly subjective and used in real estate circles to grade buildings on size, age, location and features.)
“Coming out of the pandemic, there was a lot of gratuitous denigrating of the B sector,” said Michael T Cohen, a principal at Williams Equities, which owns several buildings in the category.
The attention that Class B buildings are getting now reflects an overall improvement in office leasing in Manhattan, the New York borough with the most office space, as more employers call workers back to the office full time.
Nearly 20 million sq m (22 million sq ft) of office space has been leased in Manhattan this year, according to the most recent data from JLL, a real estate services firm. That’s 7 per cent higher than last year and the highest volume since 2020. The vacancy rate is under 15 per cent, the lowest in five years.
Class B buildings are also benefiting from the shrinking availability of space in state-of-the-art buildings. The conversion of some office spaces to housing, the demolition of others and a lack of new construction have also pushed up demand for class B and C buildings. Some landlords of older buildings have also been spiffing up their properties to make them more desirable.
Not all older buildings are sharing in the turnaround. Architecturally distinguished buildings near transit hubs are faring well, but nondescript buildings on side streets far from public transportation and without significant upgrades continue to struggle.
Landlords are able to charge more for buildings near a transportation hub, according to data from Savills and CompStak, a real estate data provider. Rents in Class B buildings near Grand Central averaged $64.87 per square foot in the third quarter this year, up 2.3 per cent from last year, and $62.91 near Pennsylvania Station, up 15.9 per cent from 2024. Rent in similar types of buildings across the rest of Midtown fell 5.8 per cent, to $45.26 per sq ft.
But even with leasing activity up, landlords are offering concessions to tenants, including renovating and furnishing spaces, which puts fewer dollars in their pockets – possibly making it harder for them to pay back banks and investors. Many companies are also opting for smaller spaces, possibly because of remote and hybrid work, which has endured; artificial intelligence, which may reduce the number of employees needed; and uncertainty about the US economy, which is causing some companies to pull back on expansion plans.
At the same time, Class B buildings have an obvious appeal in times of economic uncertainty: They’re cheaper. Trophy buildings can rent for as much as $250 per sq ft, compared with over $86 for lower-end class A buildings. Class B and C buildings fetch about $60 per sq ft, according to Savills.
Beyond cheaper rent, some tenants just prefer the character of older buildings.
The National Women’s Soccer League is leasing an office in a 1927 building on Fifth Avenue, near Grand Central, after it moved to New York from Chicago and sublet another space for a while. The league’s new home, the Fred F French Building, lacks the lavish perks of the swanky glass towers that have gone up in recent years, but there was 1,950sq m (21,000sq ft) of gutted space that offered a chance to create an office from scratch.
Since the building is short on amenities, the league is building its own, including a gym and a meeting space that has stadium seating and a turf floor. Besides, staff members, who are expected to move in this fall, will have all the offerings of Midtown at their door.
“The world is their oyster,” said Lauren Lopez, the league’s chief people and culture officer. (The asking rent for the National Women’s Soccer League’s space was $58 per sq ft, but Lopez declined to say what it is paying.)
Farther south, on Park Avenue between East 31st and East 32nd streets, the law firm Kellner Herlihy Getty & Friedman recently renewed its lease at a building constructed in 1912. Alan M Friedman, a partner, said he appreciated what trophy buildings offered – “the views are pretty when you’re up high” – but preferred older buildings, not least because of the wall space the masonry structure provides.
All the better to display his collection of New York memorabilia, including a 1.3m photo of president William Howard Taft aboard his presidential yacht, the Mayflower, on the Hudson river in 1911 when he was reviewing the Navy’s Atlantic Fleet on procession.
“It’s hard to hang a picture on a piece of glass,” Friedman said.
Another quirky feature of the building: an ornate bronze clock, by artist William Zorach, that was installed on the facade in 1926, when the property was home to silk importers. Every hour, a wizard wearing a cone-shaped hat waves a wand, and the “Queen of Silk” emerges from a cocoon.
That, you definitely won’t find on a glassy new skyscraper.
This article originally appeared in The New York Times
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