Anthropic, OpenAI, Harvey AI, and Clay are signing massive long-term leases across Midtown and downtown Manhattan, reversing the post-pandemic office slump and pushing NYC commercial real estate to its best year since 2014.
For years, the Manhattan commercial real estate market absorbed one gut punch after another — pandemic-era vacancies, the remote work revolution, and a wave of sublease listings that seemed to multiply by the week. The Midtown corridor that once defined the physical ambition of corporate America turned into a cautionary tale on loop. Then the AI industry arrived in New York, and it arrived with a checkbook.
Anthropic, Palantir, OpenAI, and others have been hiring aggressively in New York, adding office space and driving a revival for the city’s beleaguered commercial corridors. The shift is no longer incremental — it is structural, and the numbers prove it. AI firms added roughly one million square feet across Manhattan in 2025, a 152% jump from the prior year, and are currently seeking an additional 1.4 million square feet. Legacy tech companies investing heavily in their own AI capabilities added another 2.1 million square feet on top of that. Together, that is a force of demand the market simply was not modeling during the darkest years of the pandemic.
Harvey AI, Clay, and the Deals Redefining the Manhattan Market
The flagship leasing deals of 2025 and early 2026 tell the story most vividly — and two buildings at the center of the revival share the same address book: One Madison Avenue and 11 Madison Avenue, both managed by SL Green Realty.
Harvey AI expanded its Manhattan office footprint at One Madison Avenue by 92,663 square feet, bringing its total presence in the 1.4-million-square-foot Class A tower to 185,326 square feet — filling the building to capacity less than three years after it opened. Asking rents at One Madison came in at $120 per square foot, well above the citywide average.
Then came Clay. The Brooklyn-based AI sales firm signed a 10-year lease for 163,000 square feet at 11 Madison Avenue, occupying the entire 14th and 16th floors and part of the 15th floor of the 2.3-million-square-foot tower — bringing it to 100% occupancy. Clay CEO Kareem Amin cited the firm’s rapid expansion as the driver behind the move, following a funding round that valued the company at $3.1 billion.
The landlord behind both deals is now posting historic numbers. SL Green projects over 900,000 square feet of leasing in Q1 2026 alone — a company record — with nearly 500,000 square feet signed in just the first two months of the year. AI companies now account for roughly 25% of all major Manhattan office transactions.
Anthropic’s Massive NYC Office Search Could Reset the Market Again
The next blockbuster deal may already be in motion. Anthropic, the startup behind the Claude AI, is in the market for between 250,000 and 450,000 square feet in Manhattan — a dramatic expansion from the 10,000-to-20,000-square-foot footprint it currently holds at 155 Sixth Avenue, where its lease is expiring this year. At the low end of that range, Anthropic’s eventual Manhattan commitment would rank among the largest single-tenant leases New York City has seen in years, and the search is actively drawing attention from the city’s top landlords.
Why AI Companies Are Choosing New York City Over Silicon Valley
The surge in AI leasing activity is not simply a function of growth — it reflects a deliberate, strategic choice to plant roots in New York rather than the Bay Area. AI companies have adopted an office-first model that has never wavered, and are seeking properties that can support ambitious expansion plans without placing constraints on future growth. Manhattan’s Class A inventory, transit infrastructure, and unmatched talent density make it uniquely positioned to meet that demand.
New York City is now home to more than 9% of the country’s AI workers — ahead of Seattle, Boston, and Los Angeles. The city posted more than 25,000 AI-related job openings in 2025, a nationwide high, and tech employment in the five boroughs has grown 12% from 2020 to 2024, with another 13% projected by 2029.
Liz Hart, Newmark’s President of Leasing for North America, described the dynamic plainly: “You’re seeing very strong demand come out of West Coast companies — Stanford and Silicon Valley-based companies. That’s showing a reinforcement of the importance of the New York-based tech ecosystem to the national and international stage.”
The NYC Office Market Recovery by the Numbers
The AI leasing boom is lifting the broader Manhattan office market to levels that would have seemed implausible just three years ago.
Manhattan’s office market closed 2025 with 42.9 million square feet leased for the year — up more than 20% year-over-year and the highest annual total since 2014. Manhattan’s availability rate fell to 13.9% by year-end, down from 16.5% a year prior, while roughly 7.3 million square feet of sublease space was removed from the market — a nearly 40% reduction in sublease inventory.
The premium end of the market is particularly tight. AI firms agreed to pay an average of $88 per square foot in 2025 — above the citywide average of $78 — while competing specifically for flexible floor plans with strong transit access and high-end amenities. Trophy space availability in Midtown has dropped sharply, and asking rents in the most coveted buildings continue to climb.
Tech firms accounted for nearly one-third of the top 20 largest Manhattan leases in 2025 — more than triple their share from the year before. “The office recovery is no longer theoretical — it’s measurable,” said Todd Korren, Executive Managing Director at Lee & Associates NYC. “Tenants are committing to space at scale again, and fundamentals continue to tighten across the borough.”
From the Financial District to NoMad: The Revival Is Spreading
The geographic footprint of the AI office boom is widening beyond Midtown’s trophy corridor. As space tightens in high-demand neighborhoods like SoHo and the Flatiron District, AI startups are expanding into Midtown South and the Financial District, where recovery had previously lagged. Scale AI relocated from Chelsea to the Financial District to accommodate a workforce that more than doubled to 500 employees. Submarkets that spent years staring at vacancy boards are now fielding competitive offers.
What This Means for NYC Commercial Real Estate in 2026 and Beyond
The Manhattan office market is not uniformly recovered. Class B and Class C buildings outside the premium corridors continue to struggle, and the gap between trophy assets and the broader inventory remains a real challenge. Despite increased tenant demand and tightening availability, the Manhattan office market has shed only about half of its post-pandemic excess supply. Work remains.
But the defining trend for 2026 is unmistakable: New York City has become the preferred home for the AI industry’s most ambitious operators. The leases being signed today — 10-year commitments, six-figure square footage, above-market rents — are not hedged bets. They are declarations. The “for rent” signs that dotted Midtown for half a decade are coming down, and the data says they are not going back up.
New York City’s commercial real estate revival is no longer a prediction. It is a fact — and the AI industry put it there.
