Third Avenue just muscled its way into Manhattan’s triple-digit rent chatter, thanks to a mid-sized energy and trading firm willing to pay up for a high-floor perch. The tenant is taking roughly 20,000 square feet on the 32nd floor at Fisher Brothers’ 605 Third Avenue, at an asking rent brokers say is about $120 per square foot. It is the latest in a run of upgrades and tenant reshuffles that are tightening office supply along the East Side corridor.
As reported by The Real Deal, Karbone signed a 20,000-square-foot lease at 605 Third Avenue with an asking rent of $120 per square foot. The deal covers the entire 32nd floor of the 44-story tower and marks a record asking rent for the building, according to that report.
Manhattan market tightness is changing landlords' leverage
Across Manhattan, numbers have quietly shifted in favor of landlords. Asking rents have climbed, availability has tightened and owners of well-located product suddenly have a bit more swagger in pricing. According to Colliers, average asking rents and absorption improved in recent quarters and availability has been on a multiquarter tightening trend. Those fundamentals help explain why upgraded buildings can now command richer rents.
Supply is shrinking on Third Avenue
On Third Avenue specifically, the once-looser East Side strip is not quite so easy anymore. Availability has fallen from roughly 27 percent in 2022 to about 19.5 percent, helped along by large office-to-residential conversions and some chunky tenant relocations. The Real Deal reports that residential conversions alone have removed roughly 1 million square feet from the corridor over the past three years, while big vacancies have given repositioned buildings room to chase premium asking rents.
Renovations are lifting upper floors
Landlords looking to compete with shiny new towers have leaned on capital improvements, and tenants are clearly willing to pay for the fresh polish. Fisher Brothers invested about $25 million into lobby and systems upgrades at 605 Third Avenue in 2016, a repositioning that brokers say set the stage for higher asking rents, as reported by Commercial Observer.
Not limited to the East Side
The jump into triple digits on select Third Avenue floors is part of a broader Manhattan pattern. Tenants are increasingly willing to pay top dollar for best-in-class space rather than bargain hunt in older, unrenovated buildings. A JLL analysis highlighted by CoStar found record numbers of leases in 2025 that started at $100 per square foot or more, underscoring a flight to quality that benefits renovated towers.
Colliers notes that Third Avenue still is not in the same league as the city’s $150-to-$200 trophy corridors, but the strip now has a clearer runway to climb if demand continues to zero in on upgraded assets. For tenants, that means more competition for renovated blocks near transit. For landlords, it serves up a simple playbook: renovate, add amenities and price the best floors accordingly.
