Manhattan sublease space disappearing thanks to AI – Business News
Sublease space, a shadow that loomed over the Manhattan workplace market because the pandemic, is fast disappearing.
According to JLL, sublease stock within the second quarter shrank to beneath 11 million sq. ft — much less than half of its late-2022 peak of 23 million sq. ft.
Sublease stock within the second quarter shrank to beneath 11 million sq. ft, in accordance to JLL. susanne2688 – stock.adobe.com
Driving the absorption are tech and AI corporations, some of which didn’t exist 5 years in the past. In some instances, landlords took back space from tenants they’ll re-lease at greater rents.
JLL govt managing director Jamie Katcher mentioned the “most notable development” behind second-quarter momentum is, “how shortly the sublease overhang has been absorbed.
“Growth from AI firms, as well as financial services companies and law firms, is driving long-term leasing decisions, while landlords are increasingly pulling back available sublease space to pursue direct deals at substantially higher rents,” he mentioned.
The glut decline got here as AI leasing continued to soar. According to JLL, AI corporations signed 21 offers totaling 719,200 sq. ft to date in 2026 — placing the sector on tempo to match or exceed final 12 months’s 845,000 sq. ft.
AI corporations signed 21 offers totaling 719,200 sq. ft to date in 2026, JLL mentioned. Getty Images
Among the biggest offers to develop into sublease space have been AI healthcare platform Tennr, which added 125,000 sq. ft of former Google space at 345 Hudson St,; Uber, which grew by 86,000 sq. ft of beforehand WPP space at 3 World Trade Center; and Bank of Montreal, which added 82,000 sq. ft in former Roivant Sciences space at 151 W. 43d St..
Also, AI-driven financial advisory platform Datasite took 76,000 sf at 3 Columbus Circle that was beforehand leased to world advertising and marketing and promoting community VML. Datasite will use the new space for its Grata and Blueflame AI items whereas protecting its places of work at 1345 Sixth Ave.
