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Manhattan office leases trigger bidding wars as AI tenants rush in
A Chelsea building offering 17,610 square feet drew multiple counteroffers that lifted pricing from about $56 per square foot to $60 to $70.
Manhattan office leasing is increasingly resembling the bidding wars that apartment hunters have long faced, with competitive deals spreading to high-quality office space in sought-after neighborhoods, according to Commercial Observer.
The article cites an example in Chelsea at 151 West 26th Street, where the Rosen family received a burst of offers for a 17,610-square-foot availability on the top floor. The leasing process narrowed to three candidates, including two AI companies, and the final negotiated range rose after iterative counter-proposals.
Landlord and broker representatives attribute the current leasing frenzy to the artificial intelligence boom, saying AI firms have capital and are expanding faster than typical landlord build-outs. Koeppel Rosen director of leasing Max Koeppel said AI tenants can quickly outgrow space needs, with examples of companies expanding from 15,000 square feet to 30,000 within a year and 60,000 the following year.
The article also quotes JLL broker Benjamin Bass saying the competition is especially intense for turnkey spaces in Midtown South, where sublease supply is described as at new lows. Craig Deitelzweig, president and CEO at Marx Realty, said he has not seen leasing velocity like this in two or three decades, and he described demand as broader than prior cycles, spanning multiple submarkets and industries beyond tech.