Manhattan office leasing roars back in Q1 2026, fueled by AI and mega deals according to JLL office leasing research

Manhattan, NY JLL has released the topline findings from its Q1 2026 Manhattan office leasing research, and the results point to a strong start to the year despite ongoing economic uncertainty.

Q1 2026 leasing volume nearly matches last year’s record breaking first quarter.
Large deals like Amex’s two million s/f deal to anchor 2 World Trade and a steady stream of tech and AI deals boosted this quarter’s leasing velocity to almost 9 million s/f despite increased uncertainty. Q1 2025 leasing volume totaled 9.1 million s/f.

AI doubled its pace of leasing from last year.
In Q1 alone, AI firms leased 415,000 s/f – half as much space as they did in all of 2025, which was 845,000 s/f. Average lease size for AI firms is also larger this year: 34,500 s/f versus 16,600 s/f.

An AI company now holds the record for highest office rent recorded.
Nscale Global Holdings, an AI Cloud platform, lease at One Vanderbilt for $320 per s/f sets a new record for highest office rent achieved in New York. This is the first time an AI company and the second time a tech company has held that position.

Vacancy continues to fall rapidly.
Vacancy fell by 60 basis points to 13.5% in Q1 as demand has shown sustained momentum thanks to a broad industry base and continued supply constraints. Rents have also increased, with overall rents increasing by over $1 per s/f in the last quarter alone. Q1 2025 total vacancy was 15.8%

JLL vice chairman Evan Margolin said, “Even with the economic uncertainty increasing almost daily, first quarter 2026 NYC office leasing activity was strong, and a substantial commitment by American Express at 2 World Trade illustrates that New York is still the place where large occupiers need/want to be. AI companies continue to be super active, leasing up a lot more space, and in bigger chunks than before. They are also signing for more space than they need today with plans to grow into the additional space over time. This is a trend that is reminiscent of the dot com boom (and we can all remember how that ended), but this time they’re clearly focused on top-tier buildings in prime locations, which is pushing the class A market to new highs. Vacancy rates are coming down and asking rents continue to climb across the board. Overall, we are in a highly competitive market (for tenants and landlords alike) and the winners are nimble, well prepared and ready to quickly execute when the right opportunity arises. Can this velocity sustain for the remainder of 2026? Time will tell. Many occupiers are starting to have more conversations about growth in NYC vs growth in a location outside of Manhattan where rents are lower, opportunities are more plentiful and cost of living is lower, which appeals to their workforce.”