Prime Midtown office buildings are so full that the largest tenants are inking leases for towers that won’t open their doors for another five to seven years.
Citadel has leased part of the future 350 Park Ave. Deloitte is moving from Rockefeller Center to 70 Hudson Yards, now in development. C.V. Starr is going to the eventual 343 Madison Ave. And Simpson Thacher snagged the lower portion of Gary Barnett’s 570 Park Ave. — which, sources said, is being redesigned into a larger, 1.6 million-ish square feet to accommodate the law firm’s growth and attract other tenants that will pay more for the top of that tower.
“It is a game of musical chairs with large tenants jockeying for the next site to be built,” said Jonathan Mazur, who oversees research at Newmark.
A developer for the Roosevelt Hotel site and a new operator for the Chrysler Building have also yet to be chosen, leaving those prominent properties in flux.
SL Green, the city’s largest building owner, is in discussions with a “great” office tenant for 1515 Broadway — where its lease with Skydance has over three years left to run. And if that doesn’t work out, the tower will be redeveloped as a hotel with a larger entertainment podium that could host virtual Disneyland-like rides.
Tenants on the prowl include Blue Owl Capital (seeking 600,000 square feet), Capital One (seeking 850,000 square feet), Proskauer Rose (seeking 400,000 square feet) and Two Sigma Investments (seeking 350,000 square feet).
Even Penn 15, Vornado’s long dormant Hotel Pennsylvania site opposite Madison Square Garden, is getting serious lookers.
“At our Penn 15 site, we are now responding to requests for proposals for substantial blocks of space,” CEO Steve Roth said on a November conference call, adding, “This is not just kicking the tires. This is serious business.”
Other tenants are buckling down and staying put. And even large tenants are renewing in recognition that they won’t have many options until new developments arrive, explained Mary Ann Tighe of CBRE.
That’s one reason Bruce Mosler of Cushman & Wakefield said 44 tenants occupying over 100,000 square feet renewed their leases — compared to just 36 in 2024.
The problem extends to both large and mid-sized tenants that are seeking prime locations, even at high rents. “Every time we submit a proposal and there is competition, it becomes a beauty pageant as to which tenant has the better credit profile,” explained Adam Henick of Current Real Estate Advisors. “It’s the Wild West and you have to dig your heels in to get deals done.”
One of Mosler’s tenants was bumped three times in its quest for 50,000 square feet. Of course, the AI boom is partially responsible for the squeeze. For the last three years, AI pioneers have gobbled up huge swaths of square footage, with AI firms comprising 59% of all Midtown South leasing.
Savills is now tracking 2 million square feet of active AI requirements for 2026. And while some are worried the AI tenant boom will fizzle out — echoing the dotcom bust of the 2000s — brokers said, for the most part, these new entrants are well funded and have high, in-office expectations. “They are driven to high-end, amenitized Class A buildings rather than scrappy side-street properties,” said Zev Holzman of Savills.
New AI tools are also helping brokers fill spaces in spillover areas. At 875 Sixth, Grant Greenspan of Kaufman is using “social media techniques that didn’t exist before” allowing him to appeal to a younger audience.
Over the course of last year, the market shifted from, “There’s too much space” to, “There’s no space,” observed Bill Elder of RXR, one of the developers of 175 Park. “There is a continued quest to upgrade the corporate premises because what differentiates you from the competition is your office and your environment and it is really meaningful.”
Quiet room
Spaces that have not been available for 20 years along with whisper listings are popping up amid growing demand for offices.
In Midtown, the new Rolex Building at 665 Fifth Ave. is quietly offering over a dozen floors at the top of the 28-story tower. Jon Fales of Cushman & Wakefield has the triple-digit whisper listing which is being marketed by word of mouth.
“They want it to be like a club and have to approve every tenant,” said Eric Reimer of Byrnam Wood whose tenant, Angeles Wealth Management, will move there from the Seagram Building this fall.
Under the new ownership of RXR, the top of the 45-story 1211 Ave. Sixth Ave. building, where The Post is based, is being offered for the first time in 20 years. To lure a tenant to the 700,000- to 800,000-square-foot block, RXR is modernizing and enlarging the lobby and elevators and adding a slew of perks including a 22nd-floor tenant-only amenity lounge. The asking rent will be around $130 per foot, said Bill Elder of RXR.
In Chelsea, Barry Diller’s ice mountain-like IAC Building at 555 W. 18th St., will allow an outside firm to rent for the very first time. Steve Rotter of Newmark is marketing the 83,000 square feet of previously unavailable space that has Hudson River views.
Downtown, the biggest 360-plus harbor views can be scored at One World Trade. Lease a duplex office on its 89th and 90th floors in time to savor the America250 July Fourth celebrations with two ship parades and fireworks.
