AI firms fuel rebound in Manhattan office leases — – Business News
Artificial intelligence firms are fueling a sharp rebound in Manhattan office leasing — serving to drive the strongest yr for demand in more than a decade.
Manhattan leasing hit 42.9 million sq. ft final yr — with some of Silicon Valley’s main AI firms among the many most lively tenants, in response to a report from Savills, a commercial-property providers firm.
OpenAI, the maker of ChatGPT, has leased about 90,000 sq. ft on the Puck Building in SoHo for its first Big Apple office, whereas EliseAI, which providers the housing and healthcare industries, is taking round 109,000 sq. ft at 401 Fifth Ave. in Midtown to broaden its headquarters.
Artificial intelligence firms are fueling a sharp rebound in Manhattan office leasing. Gregory P. Mango
Harvey AI, the generative AI platform geared towards legal professionals, has additionally bulked up in Midtown South, growing its presence at One Madison Avenue to more than 185,000 sq. ft.
AI giants like Anthropic and Palantir have been hiring en masse in New York City, regardless of shopper fears across the new tech — driving a resurgence in town’s beleaguered office areas, in response to Bloomberg. Both firms are reportedly trying to expands their footprints in town.
Tech and AI tenants accounted for a third of giant new leases in Midtown South final yr, highlighting the sector’s growing affect in probably the most aggressive office corridors, in response to a Cushman & Wakefield report.
But a lot of that demand is restricted to high-end, amenity-rich buildings referred to as “trophy” workplaces, whereas vacancies stay a prevalent challenge for older office complexes.
In 2025, AI firms added roughly 1 million sq. ft of office space throughout Manhattan – a 152% soar from the earlier yr – and so they’re trying so as to add one other 1.4 million, Bloomberg reported.
Tech firms – many of which have invested hundreds of thousands in AI – added one other 2.1 million sq. ft to their New York City workplaces.
Many of these firms have been in search of alternatives to broaden their workplaces. Palantir is amongst them even after its co-founder Joe Lonsdale referred to as town’s democratic socialist Mayor Zohran Mamdani a “radical anti-white communist.”
Manhattan leasing hit 42.9 million sq. ft final yr, in response to a report from Savills. Emmy Park for NY Post
From 2020 by 2024, the quantity of tech firms in Manhattan jumped 21%, in response to information from JLL Research.
While the industry has helped deliver town’s office sector roaring back, there are fears that the trend might be short-lived – and observers are more and more involved that AI technology might eradicate entry-level roles and result in mass layoffs.
From 2024 to 2025, a soar in demand for New York City office space — coupled with a lack of new construction — pushed asking rents 2.8% increased to $77.57 per sq. foot, in response to Savills.
During the pandemic, tenants fled and rents fell in town at a sooner charge than most different metro areas in the US, in response to brokerage firm Jones Lang LaSalle.
Tech and AI tenants accounted for a third of giant new leases in Midtown South final yr, in response to Cushman & Wakefield. Christopher Sadowski
But the Big Apple has additionally recovered sooner than different cities, in response to Bloomberg, as financial giants like Goldman Sachs and JPMorgan have applied return-to-office mandates.
New York City is the second-largest tech hub in the nation, simply behind the San Francisco Bay Area – home to more than 9% of the nation’s AI employees and over 25,000 AI-related job postings, in response to evaluation from JLL Research and a report from Tech:NYC and the Center for an Urban Future.
The metropolis is also home to roughly 8,750 startups, more than San Francisco, in response to the Tech:NYC report.
