Big Business is Leasing Record Office Space in Mamdani’s New York

The second largest bank in the country.

The biggest cosmetics company in the world.

Two of the top 50 U.S. law firms.

And a score of AI companies ranging from industry leader Anthropic to scores of small startups.

What they all have in common is that in the last three months they signed long-term leases for office space in New York.

New York City may be led by a democratic socialist who spends a lot of time castigating big business and landlords and leading a progressive coalition determined to raise taxes on the wealthy and corporations. But leaders at some of the largest companies and professional service firms remain firmly committed to New York, the latest data on the office market shows. The mayor has taken note.

“The fact that companies across sectors are continuing to make major investments in our city speaks to the strength of the fundamentals of our city’s economy,” Mayor Zohran Mamdani told The City Reporter in a statement. “They believe in New York’s future.”

Real estate executives, who remain skeptical of the mayor’s initiatives, say the good news comes with a caveat.

“When companies are making 10-, 15- and 20-year real estate decisions, they are betting on where they believe talent, innovation and opportunity will be concentrated in the future,” said James Whelan, president of the Real Estate Board of New York. “The surge in major office leases across industries reinforces the need for policies that keep New York competitive for employers and workers alike.”

Whelan’s warning came as Mamdani’s allies in the Democratic Socialists of America are preparing to push Gov. Kathy Hochul for long-sought new taxes on the rich and big businesses after the November election.

“Our focus is on maintaining New York’s competitive advantages and continuing to attract investment so that New Yorkers benefit from good jobs and share in the prosperity of our city,” Mamdani said. 

Rising Commercial Rents

For now, the Manhattan office market is the strongest it has been in years, going back to well before the pandemic, according to a report from the real estate brokerage firm Colliers.

Leasing in the first half of the year was about 23 million square feet. If the second half is equally strong, the amount of space leased will be the highest since 2000. Each of the last three quarters has exceeded 11 million square feet contracted-for, the first time that has happened since 2002.

The amount of vacant New York office space declined by almost a percentage point to 13% and, in a sign of demand, the average asking rent has jumped by 6% over the past 12 months to $78.03 a square foot.

“It is not just by one key industry but financial services, professional services, tech, artificial intelligence, consumer goods,” said Frank Wallach of Colliers.

New York has one of the strongest office markets in the country, with the vacancy rate in the country’s major cities averaging more than 20%. Back-to-the-office requirements are strictest in the financial service companies that are such a big part of the New York economy. Landlords are aggressively converting obsolete office buildings to residential use, a trend not expected to be derailed by the near-collapse of the former Pfizer building on 42nd Street. 

And the diversity of the city’s business base plays a key role. For example, San Francisco, which is benefiting even more than New York from AI company growth, still has more than 22% of its office space available.

It has been clear for months that Wall Street firms and banks remained firmly tethered to New York despite a public confrontation between Ken Griffin, one of the wealthiest hedge fund executives in the country, and the mayor and complaints about plans for higher taxes from executives like J.P.Morgan Chase’s Jamie Dimon.

Those commitments were confirmed in the last three months when Bank of America announced that it would expand its presence from 1.8 million to 2.4 million square feet in a 20-year lease, taking all the office space at a tower on 6th Avenue and 42nd Street.

“One Bryant Park is a critical cornerstone for our global business,” the bank, which is headquartered in Charlotte, N.C., said in a statement.

The law firm of Simpson Thacher & Bartlett signed an almost 1 million square foot lease on Fifth Avenue and Clearly Gottlieb Steen and Hamilton reupped for 500,000 square feet downtown at 1 Liberty.

Cosmetics giant L’Oreal Groupe also renewed a lease for almost half a million square feet in Hudson Yard.

The AI Surge

Artificial intelligence may someday eliminate tens of thousands of white collar jobs that occupy so much office space, but for now AI companies are supercharging the market. 

Last year AI companies leased twice as much space as in 2024, according to Colliers. So far this year AI companies signed up for about 1.5 million square feet, nearly double the 800,000 square feet they signed up for in all of 2025.

On Wednesday the leading AI firm in the country, Anthropic, confirmed it would lease the entire building at 330 Hudson taking almost 500,000 square feet as it doubles its workforce to 1,000. The neighborhood is also home to Google’s New York campus where 14,000 people work, making it by far the largest tech company in the city.

But most of the AI companies are small startups — and many of them are choosing Brooklyn.

When the landmarked Refinery office building opened at the iconic former Domino sugar factory in Williamsburg in late 2023, developer Two Trees figured the location would prove attractive to tech companies given the concentration of the talent in Brooklyn. Before too long, it was inundated with interest from the hundreds of artificial intelligence startups emerging in the city.

Today, the Refinery is 90% leased, with AI companies comprising half of the 80 relatively small tenants in the building. Many of the staff walk to work since they live in that part of the borough, and Two Trees found that many of the companies interested in the building find out about it from old-fashioned word of mouth, says Alyssa Zahler, the company’s head of commercial leasing

Two Trees’ asking rent is between $70 and $90 a square foot, not far from what Manhattan landlords get. The average lease is only 3,000 square feet and the company signs two to three-year deals given the uncertainty of where AI is headed and which startups will actually succeed.

But for now the Refinery is a buzz of activity.

“It is super important for them to be in the office five days a week or even seven,” Zahar said. “They are really committed to a team environment and having great views and proximity to other people is of utmost importance.”

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