Artificial intelligence firms are accelerating their expansion in New York City office space, with leasing activity running at twice last year’s pace, according to JLL. By March 31, AI tenants had already completed leasing volumes equal to roughly half of all AI leasing recorded for the full year 2025, underscoring how quickly this segment of the market is scaling its footprints.
JLL’s data also points to a notable jump in the size of the average AI lease. The typical transaction has grown from about 16,600 square feet to approximately 34,500 square feet, more than doubling in a year. This shift suggests that AI tenants are not just growing in number but are also committing to materially larger offices as their businesses evolve.
Manhattan’s top-tier towers are capturing some of the most aggressive deals in this wave of activity. Nscale Global Holdings’ lease at One Vanderbilt briefly reset the high-water mark for Manhattan office rents at $320 per square foot. That benchmark was subsequently surpassed by a lease signed by a family office at 9 W. 57th St., which achieved rent of $327.50 per square foot, establishing a new ceiling for the market.
Benjamin Bass, vice chairman at JLL, told the New York Business Journal that the AI cohort in New York consists largely of more mature, well-funded companies that have moved beyond initial product development. These firms are now focused on building out sales and go-to-market teams, and their space needs reflect that stage of growth. As a result, AI occupiers are frequently leasing more space than their current headcount requires, positioning themselves for anticipated hiring.
JLL also reports that AI companies are rethinking how they structure their office commitments. As these businesses use AI to compress their own planning timelines to 12 to 24 months, they are seeking lease agreements with built-in flexibility. Desired features include adjustment mechanisms that allow them to scale up or reconfigure space and facilities that can be adapted as their organizational needs change.
Recent leasing includes activity at 295 Fifth Ave., where AI firm Agentio signed a lease in March. While detailed terms were not disclosed, the transaction illustrates how emerging AI tenants are choosing centrally located Manhattan properties to support their expansion plans and talent strategies.
Overall, the combination of higher leasing volumes, larger average deal sizes, and record-setting rents at premier addresses suggests that AI tenants are becoming a consequential demand driver in the New York City office market. Landlords positioned to accommodate rapid growth and flexible space configurations appear best placed to capture this evolving tenant segment.
