Technology firms have emerged as New York City’s second most active office leasing sector, trailing only finance, as artificial intelligence drives new demand for workspace, according to a recent JLL report. The study finds that finance, law and technology users together now account for more than 70% of the city’s leasing activity so far this year, compared with an average share of about 50% through the 2010s.
JLL’s analysis shows that tech tenants leased approximately 1.1 million square feet of office space in the third quarter. Companies focused on AI were responsible for more than 60% of that volume, underscoring the role of AI-related growth in reshaping technology requirements for offices. The report also notes that many traditional media and advertising firms are evolving into tech-oriented businesses, a shift that contributed to technology surpassing law as New York City’s second-largest driver of leasing activity.
Across the broader office market, leasing momentum remains strong. Tenants committed to 1.5 million square feet of space in August alone, bringing total leasing volume for the year to date to 22.5 million square feet. This elevated activity coincides with tightening availability, which has dropped below 12.5% for the first time since 2018, according to JLL’s findings.
With the pool of available options shrinking, pricing power is tilting back toward landlords. Average direct asking rents across New York City’s office inventory have climbed to $86.71 per square foot. At the same time, the total volume of available office space has contracted to 58.2 million square feet, signaling less slack in the market than in recent years.
The supply side is also showing signs of shifting. JLL managing director Joe Sipala noted in a statement that much of the city’s new office construction pipeline has already been claimed by tenants. As a result, speculative development is “back in the conversation” as market participants assess how to meet ongoing demand. Existing building owners are described as moving quickly to reposition their assets to compete for tenants.
Sipala added that demand for high-end, quality space is now outpacing what is currently available. This imbalance is prompting a renewed race among developers and landlords to deliver the next generation of office product. For now, the combination of active AI-driven technology leasing, sustained finance and legal demand, and a tightening supply of space is reshaping the dynamics of New York City’s office leasing landscape.
