AI Firms Lease 1 Million Square Feet in NYC in Q1, Surpassing All of 2025

3 articles · Updated · Gothamist · Jun 22

1 million square feet of New York City office space was leased by AI firms in the first quarter of 2026, already topping the sector’s full-year 2025 total, according to Cushman & Wakefield.
Recent deals show the breadth of the push: Sierra took 94,000 square feet, Altana signed for 62,000 in Midtown, and Synthesia closed on 50,000 in Flatiron.
90% of AI leasing over the past year has been new leases rather than renewals, injecting fresh demand into Manhattan office markets still recovering from pandemic-era vacancies, especially in Midtown and Midtown South.
New York’s draw includes talent, research labs and proximity to major customers; JLL estimates nearly 1,100 AI startups in the city and a median advertised salary of $155,000.
The boom could lift jobs and tax revenue, but city officials and analysts warn it may also raise housing costs and could reverse sharply if AI adoption or profits disappoint.

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AI Firms Drive 41% Surge in Manhattan Office Leasing: Q1 2026 Market Analysis and Outlook

Overview

In the first quarter of 2026, Manhattan saw a sharp rise in office leasing activity, mainly driven by the rapid expansion of artificial intelligence (AI) firms. These companies are scaling up and actively seeking premium office spaces in established tech hubs, intensifying competition for prime locations. A standout example is Legora, which secured a major lease at 838 Broadway after raising $150 million, highlighting the strong financial backing behind these moves. This heightened demand from AI companies is reshaping the market, as landlords respond to the growing need for high-quality, flexible office environments in Manhattan.

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