Artificial intelligence firms are fueling a sharp rebound in Manhattan office leasing — helping drive the strongest year for demand in more than a decade.
Manhattan leasing hit 42.9 million square feet last year — with some of Silicon Valley’s leading AI firms among the most active tenants, according to a report from Savills, a commercial-property services firm.
OpenAI, the maker of ChatGPT, has leased about 90,000 square feet at the Puck Building in SoHo for its first Big Apple office, while EliseAI, which services the housing and healthcare industries, is taking around 109,000 square feet at 401 Fifth Ave. in Midtown to expand its headquarters.
Harvey AI, the generative AI platform geared toward legal professionals, has also bulked up in Midtown South, growing its presence at One Madison Avenue to more than 185,000 square feet.
AI giants like Anthropic and Palantir have been hiring en masse in New York City, despite consumer fears around the new tech — driving a resurgence in the city’s beleaguered office spaces, according to Bloomberg. Both firms are reportedly looking to expands their footprints in the city.
Tech and AI tenants accounted for a third of large new leases in Midtown South last year, highlighting the sector’s growing influence in the most competitive office corridors, according to a Cushman & Wakefield report.
But much of that demand is restricted to high-end, amenity-rich buildings known as “trophy” offices, while vacancies remain a prevalent issue for older office complexes.
In 2025, AI firms added roughly 1 million square feet of office space across Manhattan – a 152% jump from the previous year – and they’re looking to add another 1.4 million, Bloomberg reported.
Tech firms – many of which have invested millions in AI – added another 2.1 million square feet to their New York City offices.
Many of these companies have been looking for opportunities to expand their offices. Palantir is among them even after its co-founder Joe Lonsdale called the city’s democratic socialist Mayor Zohran Mamdani a “radical anti-white communist.”
From 2020 through 2024, the number of tech firms in Manhattan jumped 21%, according to data from JLL Research.
While the industry has helped bring the city’s office sector roaring back, there are fears that the trend could be short-lived – and observers are increasingly concerned that AI technology could eradicate entry-level roles and lead to mass layoffs.
From 2024 to 2025, a jump in demand for New York City office space — coupled with a lack of new construction — pushed asking rents 2.8% higher to $77.57 per square foot, according to Savills.
During the pandemic, tenants fled and rents fell in the city at a faster rate than most other metro areas in the US, according to brokerage firm Jones Lang LaSalle.
But the Big Apple has also recovered faster than other cities, according to Bloomberg, as financial giants like Goldman Sachs and JPMorgan have implemented return-to-office mandates.
New York City is the second-largest tech hub in the country, just behind the San Francisco Bay Area – home to more than 9% of the nation’s AI workers and over 25,000 AI-related job postings, according to analysis from JLL Research and a report from Tech:NYC and the Center for an Urban Future.
The city also is home to roughly 8,750 startups, more than San Francisco, according to the Tech:NYC report.
This story originally appeared on NYPost
