The artificial intelligence boom propping up office markets along the West Coast is trending eastward as fast-growing startups quickly scoop up growing blocks of New York space.
A string of recent expansions among companies such as Tempus AI, Sigma, Harvey AI and Synthesia underscore the sector's center-stage role in the national office market recovery. While much of the industry has established roots in tech-concentrated hubs such as Silicon Valley and San Francisco, their demand and appetite for space has spilled into other major markets, such as Manhattan.
For Tempus AI, that means relocating its initial New York office to space roughly double the size. The health technology company inked a deal with landlord SL Green to take over about 39,600 square feet at 11 Madison Ave. The decade-long agreement will result in Tempus moving from its roughly 22,700-square-foot office a few blocks away at 230 Park Ave. — where it has been for the past five years — a move expected for sometime in early 2026.
The deal is the second artificial intelligence company SL Green has landed for space within its Manhattan portfolio.
In June it finalized a deal with Sigma, a cloud-based data analytics and software company that agreed to take more than 64,000 square feet in the real estate investment trust’s One Madison Avenue building. The lease, which kicks off at the start of 2027, will more than quadruple the San Francisco-based company’s New York footprint, which currently spans about 15,000 square feet in the Zero Irving building just off Union Square.
“The AI and tech demand is just starting to get revved up,” SL Green CEO Marc Holliday told analysts on the landlord’s recent earnings call. “And that [activity is] only increasing, in our opinion. It’s all driven by AI and tech.”
Starting line for growth
Leasing among tech companies across the United States rose by more than 21% through the first quarter of the year compared with the same period in 2024, according to CBRE data, a spike that accounted for just shy of 8 million square feet worth of deals. That activity represented a roughly 16.5% share of total office leasing volume nationally and builds off the momentum tech companies generated last year when they accounted for about 18% of all U.S. leasing.
By comparison, leasing among tech companies represented a little more than 14% of the total national leasing volume in 2023, according to CBRE.
In San Francisco alone, AI companies have swelled their collective footprint to more than 5 million square feet over the past couple of years, according to CBRE data, and the sector has the potential to stretch beyond 21 million square feet over the next five years.
Beyond the Bay Area, that demand is unfurling in markets such as Seattle, Boston, New York City, Denver and Austin, Texas.
Landlords are especially optimistic about the global AI boom given how quickly many startups are enlarging their real estate portfolios by adding office locations or rapidly making existing ones bigger.
Harvey AI, for example, has within the past year signed deals to expand both its San Francisco hub and its regional office in Manhattan. The company, a provider of automation services for the legal industry, last month agreed to fill about 92,000 square feet at Kilroy Realty’s 201 Third St. building in San Francisco to more than triple its headquarters space in the city.
That deal closed just a few months after the startup agreed to expand its New York office at Columbia Property Trust’s 315 Park Ave. South building for the second time within less than a year. Harvey AI initially signed a deal for a full floor of the property in early 2024, adding another floor last September to fill more than 34,000 square feet.
While some companies are starting small, executives at Kilroy, SL Green and Los Angeles-based Hudson Pacific Properties have said many of their spatial requirements have been quick to build as AI startups scramble to keep up with head count and revenue growth.
Synthesia, for example, recently finalized a deal for another 13,600 square feet at the Moinian Group’s 245 Fifth Avenue building in Manhattan’s Flatiron District. While it is far from the largest AI-driven deal for the city, it more than doubles the company’s current 6,500-square-foot space in the 26-story building, which it moved into back in 2023.