Jul 17, 2026
Artificial intelligence companies are coming to New York City
Here’s what that means for commercial real estate in the Big Apple
Workplace/Jobsby Kimberly Adams, Ariana Rosas and Emma Condon
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Artificial intelligence company Anthropic is the latest to announce it is expanding in New York City. It joins a host of other AI companies such Palantir, OpenAI, and EliseAI in seeking out additional office space as it moves to hire more workers
For more on what this means for the state of commercial real estate in the city, “Marketplace Morning Report” host Kimberly Adams spoke with Natalie Wong, commercial real estate reporter at Bloomberg. The following is an edited transcript of their conversation
Kimberly Adams: What is drawing these tech companies to New York City in particular?
Natalie Wong: You know, really, a lot of these firms are in later-stage sort of phases, and they’re looking to raise more capital, handle more sales, and a lot of that talent is concentrated in New York City, which is the financial center of the U.S. and the world
Adams: How much of the draw is also all the empty office space in the city?
Wong: Definitely, the fact that there is significant amount of office space for them to grow into at relatively cheaper prices is definitely a draw. But I think there’s a distinction to be made between the more established firms and the startups. The established firms like the OpenAI’s, Anthropic, they’re going for the best trophy-type offices. But the area of the New York City commercial market that’s really been suffering for the past six years has been the older — what the industry calls Class B, Class C offices. These are more aged office buildings. What we’re seeing now is that this AI rush and this tech rush has actually brought more demand for these types of buildings because a lot of these firms are startups. They may not be as well capitalized, so this is actually like very cheap space for them. And this was really a boost that the overall commercial real estate market has been looking for.
Adams: The city had been counting on office-to-residential conversions, trying to solve that housing shortage and office glut at the same time. Where does this AI leasing push fit into all that?
Wong: You know, I think that office-to-residential conversions have played a significant role in reducing the overall supply. We’ve seen hundreds of thousands, if not millions, of square feet of office space being completely taken offline because they’re being converted to housing, and frankly, much-needed housing. So I think that’s one portion of helping the overall office market. I think the AI leasing comes in as another boost for the office market. You know, they may be taking space in offices that cannot be converted to residential simply because of the floor plates, or because of where they’re located in the city, it doesn’t make sense to convert, or it’s too costly. And so, these are the types of buildings that these startups are looking for space in.
Adams: You know, we’ve all heard a ton about how AI is threatening jobs, but here we have the AI industry coming into a city and promising to add jobs. Have you seen any indication that these moves are actually going to have a meaningful impact on New York’s labor market?
Wong: What I’ve been hearing in all my conversations across the real estate industry, across the tech industry is really, like, no one knows exactly what’s going to happen longer term. But most people are confident that in the short-term time frame — and when I say short term, I mean under 10 years. Some people are really looking at three to five years, they’re not concerned — now that’s a very short time frame. I mean, most office leases stretch far beyond that. So, I do think there is a real concern. You know, 10 years later, how much will AI impact [the] workforce once it evolves more? Once leaders have a better understanding of how it impacts their work, will that reduce overall headcount? I think many people are concerned about that longer term.
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