{"id":188895,"date":"2026-04-07T22:23:26","date_gmt":"2026-04-07T22:23:26","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/188895\/"},"modified":"2026-04-07T22:23:26","modified_gmt":"2026-04-07T22:23:26","slug":"ai-companies-growing-their-nyc-offices-at-breakneck-speed","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/188895\/","title":{"rendered":"AI Companies Growing Their NYC Offices At Breakneck Speed"},"content":{"rendered":"

Deep-pocketed\u00a0artificial intelligence<\/a>\u00a0firms are heralding the next phase of New York\u2019s office recovery,\u00a0racing to grow their workspaces as fast as they hope to transform the economy.<\/p>\n

On the heels of one of the\u00a0most active years<\/a>\u00a0in the office market’s recent history, AI companies have already secured half of their 2025 total leasing volume in just\u00a0the first quarter, according to\u00a0JLL<\/a>.<\/p>\n

With cash to burn and growth plans to execute, the industry is\u00a0in the midst of an aggressive land grab.<\/p>\n

\u201cIn the last 48 hours, I\u2019ve fielded calls from half a dozen AI or AI-adjacent companies looking for\u00a0office space,\u201d\u00a0Two Trees Management<\/a>\u00a0Managing Director of Commercial Leasing Alyssa Zahler said. \u201cThey call, they tour that day or that week, and maybe we even have a document signed within two weeks, which is very quick.\u201d<\/p>\n

\"Placeholder\"\/<\/p>\n

A total of 8.5M SF of Manhattan office space has been leased so far this year, with AI firms taking 415K SF, according to JLL.\u00a0<\/p>\n

Vacancy has continued to fall, hitting 13.5% by the beginning of April, according to JLL. The limited supply has allowed landlords to raise asking rents by\u00a0more than $1 per SF this quarter\u00a0to $83.51 on average.<\/p>\n

Most AI companies scouring the market are seeking flexible, short-term leases for plug-and-play space. But following a return-to-office push by financial tenants and other more traditional players, it is becoming increasingly difficult to check off all the requirements on their lists.\u00a0\u00a0<\/p>\n

\u201cIt’s a very common conversation right now amongst brokers asking, \u2018Hey, do you have anything off market?\u2019\u201d Cushman & Wakefield Vice Chair Mike Movshovich said. \u201cThey’re like, \u2018If I had it, I wouldn’t tell you because we have other clients that need it, and we can’t find it.\u2019\u201d<\/p>\n

But some companies are better equipped to pay for what they need. Nvidia-backed AI infrastructure firm Nscale<\/a>\u00a0signed the second-most-expensive lease in NYC history during the first quarter. Shortly after closing a $2B funding round that valued the startup at $14.6B<\/a>, Nscale agreed to pay $320 per SF for approximately 7,200 SF at SL Green<\/a>\u2019s One Vanderbilt<\/a>,\u00a0Bisnow reported<\/a>.<\/p>\n

In March, Harvey AI doubled its footprint in SL Green\u2019s One Madison Avenue to 185K SF<\/a>\u00a0after signing its initial lease in October. Later that month, the legal engineering business announced $200M in new funding. In a statement<\/a>, Harvey said its recent $11B valuation followed a period of rapid growth that bumped its customer base to more than 100,000 lawyers.<\/p>\n

AI companies are increasingly planning ahead when it comes to their leasing needs. Average deal size has more than doubled from 16,600 SF to 34,500 SF, according to JLL.\u00a0Fifty-five percent\u00a0of recent AI leasing activity has been for future growth space.<\/p>\n

\u201cThis is a trend that is reminiscent of the dot com boom (and we can all remember how that ended),\u201d JLL Vice Chairman Evan Margolin<\/a> said in a statement.<\/p>\n

The emergence of new technologies led leasing volumes to hit 31.5M SF in 2000<\/a>, the year that the dot-com bubble peaked, according to a Cushman & Wakefield report. The next year, office leasing dropped to 18.9M SF<\/a>.<\/p>\n

The rise of new media, such as BuzzFeed<\/a> and Vice Media<\/a>, caused another leasing renaissance. 2011 was the first year to come close to 2000\u2019s level, with 30.1M SF of deals inked. By the third quarter of 2013, nearly 7,000 high-tech companies called New York City home, with four times faster job growth than the rest of the city\u2019s economy, according to a state comptroller report at the time<\/a>.<\/p>\n

But the tech industry pulled back soon after. Digital publishers began shrinking first, before the pandemic caused the rest of the industry to retrench. In 2023, more than one-third of the roughly 22M SF available for sublease in Manhattan came from technology, advertising and media companies,\u00a0The New York Times reported<\/a>.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n The Refinery at Domino, a redeveloped office building on Williamsburg’s waterfront\n <\/p>\n

Taking lessons from the past,\u00a0Current Real Estate Advisors<\/a>\u00a0co-founder\u00a0Adam Henick<\/a>\u00a0said landlords\u00a0find themselves\u00a0\u201cin somewhat of a Catch-22.\u201d<\/p>\n

Is it worth taking the risk on a tenant that is flush with cash now but may not survive the full duration of the lease term, or will a more creditworthy tenant, who may be less willing to pay high rents, be a better bet?<\/p>\n

\u201cIt\u2019s not situations where there’s years and years of historical tax returns to point to. This is about explaining the story and the vision,\u201d Henick said. \u201cIt’s almost as if landlords have to put themselves in the shoes of the venture capital firms that are giving these AI companies money.\u201d\u00a0<\/p>\n

Among the\u00a0AI deals\u00a0Current recently completed is a five-year, 27K SF lease for Legora at 838 Broadway. The legal platform had closed a $150M fundraise the month before.<\/p>\n

Nearby, at\u00a0817 Broadway, the brokerage helped lease approximately 3K SF to Paris-based crypto company Ledger. The lease term runs for just two years and five months at an asking rent of $120 per SF.\u00a0<\/p>\n

With new startups popping up seemingly every day, some landlords simply don\u2019t want to roll the dice. Others are using AI companies\u2019 need for short-term leases and built-out space to their advantage.\u00a0<\/p>\n

In cases where a landlord has already signed a lease with expansion rights with a longer-term tenant,\u00a0the owner\u00a0can temporarily fill the unused space with an AI startup, Movshovich said.\u00a0<\/p>\n

\u201cThey’re more than happy to take the shorter term, even though they could effectively be kicked out,\u201d\u00a0he said.\u00a0<\/p>\n

Other landlords are more flexible. At The Refinery at Domino in\u00a0Williamsburg<\/a>, 22 of\u00a0Two Trees<\/a>\u2019 53 leases were signed by AI companies. Though the leases may be short term, typically spanning three years, they have paid off in the long run, Zahler said.<\/p>\n

Blockchain infrastructure company LayerZero and creative tool developer Flora have doubled their spaces at The Refinery. Flora expanded three times.<\/p>\n

Several tenants started at Ten Grand, a nearby office building also owned by Two Trees, before expanding at The Refinery. That includes cybersecurity firm Outtake AI, which moved from 3K SF at Ten Grand to 12K SF at The Refinery.\u00a0<\/p>\n

Internet marketplace Whop similarly started at 3K SF at Ten Grand before leasing 10K SF at The Refinery. It now has reached a $1.6B valuation and occupies 30K SF in the building.\u00a0<\/p>\n

Zahler said that due to the nature of building a startup, AI companies are particularly active office users. In The Refinery, 90% of companies are in five days a week, and at least five companies consistently have employees coming in seven days a week.<\/p>\n

To further attract tenants, Two Trees hosts a monthly demo day to showcase businesses in its buildings, alongside larger, more established tech companies.\u00a0<\/p>\n

\u201cA lot of these tenants are coming from word of mouth. They work together. They know each other,\u201d Zahler said. \u201cThat has created a snowball effect in the building.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Deep-pocketed\u00a0artificial intelligence\u00a0firms are heralding the next phase of New York\u2019s office recovery,\u00a0racing to grow their workspaces as fast…\n","protected":false},"author":2,"featured_media":188896,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[28868,8197,75739,75740,3272,48182,1505,75737,9,56,63,65,64,4191,75738,52206,45056],"class_list":{"0":"post-188895","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-york-city","8":"tag-adam-henick","9":"tag-alyssa-zahler","10":"tag-artifical-intelligence","11":"tag-current-real-estate-advisors","12":"tag-cushman-wakefield","13":"tag-evan-margolin","14":"tag-jll","15":"tag-mike-movshovich","16":"tag-new-york","17":"tag-ny","18":"tag-nyc","19":"tag-nyc-headlines","20":"tag-nyc-news","21":"tag-sl-green","22":"tag-the-refinery","23":"tag-two-trees","24":"tag-two-trees-management"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/188895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=188895"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/188895\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/188896"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=188895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=188895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=188895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}