July 2026 Newsletter – The AI Feast in New York City
AI is leading the demand for high quality office space and bringing with it a much-welcomed revival to the NYC office market.
While much of the reporting on AI is focused on potential job losses, NYC has seen an increase in AI employment and with it an increase in the AI footprint in office space. NYC continues to be a draw for both large and small tech firms alike due to its bustling city life, proximity to universities and capital and its pool of top tech talent.
However, it is important to keep an eye on the impact that AI will have on the market in the future. We are experiencing an AI boom, and the overall NYC economy will see many benefits from the growth of the AI market in the city, but there will be a long-term impact. As more companies adopt this technology, there will be job loss and with it, contraction in office space.
But for now, NYC is one of the winners in the AI boom… let the feast go on!
AI – A Growing Source of Leasing Demand
AI companies have become one of Manhattan’s fastest-growing sources of new leasing demand:
- AI firms leased roughly 1 million square feet during the first quarter of 2026 alone, already exceeding all of 2025’s AI leasing volume.
- AI companies now account for more than half of technology leasing activity in Manhattan.
- Nearly 90% of AI leases represent new demand, rather than renewals, meaning these companies are adding to the market instead of simply replacing existing tenants.
Recent examples include:
- OpenAI
- Anthropic
- Harvey
- Palantir Technologies
- EliseAI
AI Companies Prefer Offices
Unlike many traditional technology companies, AI firms increasingly view the office as a strategic asset rather than just simply a workplace. Many believe in-person collaboration accelerates product development, strengthens recruiting and mentoring, protects proprietary research, and fosters the culture needed to drive innovation. AI companies are placing a higher value on office locations that can help them meet their strategic goals.
AI and Office Job Elimination
AI will undeniably have an impact on the future of business. It is expected to reduce headcounts in some functions by automating tasks and will especially have an impact in certain administrative and entry-level roles. As this occurs, there will likely be a slowing of demand in office space as tenants reevaluate their space needs and begin to cut back in these areas.
However, its impact on office demand is likely to be more balanced than many assume. At the same time, AI is driving the growth of new companies and expanding demand across industries such as finance, legal services, healthcare, consulting, cybersecurity, and media. New York is particularly well positioned, given its concentration of these sectors and the rapid pace of enterprise AI adoption. As AI reshapes the economy, its effect on office demand will likely depend less on overall employment and more on where new businesses are forming and how companies choose to use their office space.
AI Deals in New York City
Over the past 12 months, AI companies have become one of the single largest source of new office demand in Manhattan. AI firms leased approximately 845,000 square feet during 2025, and the pace has accelerated in 2026, with more than 719,000 square feet already leased through the first half of the year.
Below are the largest announced AI-focused office transactions in New York over roughly the last 12 months.
| Company | Square Feet | Building | Status |
| Anthropic | 466,000 | 330 Hudson Street | Reportedly finalizing full-building lease |
| Harvey AI | 185,000 | Office tower overlooking Madison Square Park (reported to be 11 Madison Ave.) | Expansion announced |
| Tennr | 125,733 | 345 Hudson Street | Signed sublease from Google |
| EliseAI | 109,000 | Grand Central area (building not publicly confirmed) | New headquarters lease |
| OpenAI | 90,000 | The Puck Building | East Coast headquarters |
Please see below links:
As availability continues to decline in premier buildings and key neighborhoods in New York City, tenants are facing increasing competition for high-quality office space, along with upward pressure on rents. While market conditions remain outside of a tenant’s control, navigating today’s environment requires a proactive and strategic approach. We can provide experienced tenant representation that can play a critical role in identifying opportunities, overcoming supply constraints, and securing favorable outcomes in an increasingly complex market. In any market, our message remains the same: Organizations that begin evaluating and executing their office strategies early are consistently best positioned
We invite you to watch the video linked below and contact us for a complimentary lease review or space planning consultation to explore how early planning can benefit your organization.
