At a glance
- Finance, law, and tech together account for more than 70 percent of the city's year-to-date leasing activity against roughly 50 percent across the 2010s, and while some of that lift is classification—media and advertising firms that evolved into technology businesses now count in the sector—the tilt in the tenant mix is measurable regardless.
- Market-wide, the report describes a supply squeeze—total availability has dropped below 12.5 percent for the first time since 2018, leaving 58.2 million square feet in play—while average direct asking rents have climbed to $86.71 a square foot and leasing volume reached 22.5 million square feet year to date, including 1.5 million in August.
- The dollar figure is the tell: an average asking rent near $87 attached to sub-12.5-percent availability describes scarcity at the top of the market, where the same buildings are winning tenants and buyers while the rest of the stack waits, and the JLL report identifies the tenant those buildings are now competing for.
The top of the New York office market tightened another notch in the third quarter: technology firms leased 1.1 million square feet, AI companies drove more than 60 percent of that volume, and the sector passed legal as the city's second-largest leasing engine behind finance, according to a JLL report summarized by Connect CRE.
Finance, law, and tech together account for more than 70 percent of the city's year-to-date leasing activity against roughly 50 percent across the 2010s, and while some of that lift is classification—media and advertising firms that evolved into technology businesses now count in the sector—the tilt in the tenant mix is measurable regardless.
Market-wide, the report describes a supply squeeze—total availability has dropped below 12.5 percent for the first time since 2018, leaving 58.2 million square feet in play—while average direct asking rents have climbed to $86.71 a square foot and leasing volume reached 22.5 million square feet year to date, including 1.5 million in August.
The trophy squeeze
The dollar figure is the tell: an average asking rent near $87 attached to sub-12.5-percent availability describes scarcity at the top of the market, where the same buildings are winning tenants and buyers while the rest of the stack waits, and the JLL report identifies the tenant those buildings are now competing for. AI has been read as a data-center story, a power-and-land trade; in Manhattan, the same capital cycle is showing up as demand for next-generation office.
“With much of the new construction already spoken for, speculative development is back in the conversation,” JLL managing director Joe Sipala said in the report, a remark that reads as its own market split: developers only talk about building on spec where today's rents justify tomorrow's product.
Nothing about the report changes the math for buildings below that tier: sub-12.5 percent availability is a citywide statistic, while the $86.71 average attached to it is a top-of-market one. AI can tighten the top further; the commodity stack moves only when the spillover reaches it, in leases for second-generation buildings priced below next-generation levels.
Reported by the Sectors desk from Connect CRE. Published . Corrections