Fresh off a $6.6 billion fundraise last October, OpenAI inked a 90,000-square-foot office lease at Kushner’s Puck Building in Soho, its first New York City office.
It wasn’t the only one. The fintech firm Chime secured an 84,000-square-foot space last month at Bromley Companies’ 122 Fifth Avenue in Flatiron, an expansion from its current location. AI intelligence company AlphaSense announced this week it was leasing 50,000 square feet at CommonWeath’s Hudson Commons, relocating from Union Square to a bigger space in Hudson Yards.
For several years after the pandemic, technology companies drastically scaled back office leasing and put millions of square feet on the sublet market. Now, thanks in part to stabilizing interest rates and venture capital funding returning to some hot tech sectors, these businesses are growing — and inking large leases again.
The sector kicked off 2025 with its strongest start in 25 years, according to a new CBRE report on tech leasing in Manhattan. Tech tenants inked deals for 1.2 million square feet in the first quarter and added another 441,000 square feet in April. That was almost the total for the entire year in 2023, when tech leasing dropped to its lowest level since 2011, according to CBRE.
“The main story up until about six-plus months ago was the businesses were focused on profitability and more efficient operations,” said Savills broker Gabe Marans. “Then, they had achieved that new status and were at a point where they were being solicited to accept additional funding rounds because their businesses were so strong.”
With that came a need for more office space.
Large companies like Amazon and Apple are inking deals again, and mid- and early-stage firms are also taking up space. Venture capital funding in New York City has started to grow again, reaching $17.3 billion last year, per CBRE. Fresh capital flowed to artificial intelligence companies, driving the leasing comeback. Meanwhile, tech companies are increasingly adopting hybrid work schedules.
“C-suites are surprised that the employees are responding to the three-day-a-week mandates,” said CBRE broker Sacha Zarba. “Then, on days when they’re not mandated, employees are coming in.”
Tech leasing started to pick up last year, as the broader Manhattan office market turned a corner. Apple inked a 398,000-square-foot expansion and renewal at Vornado’s Penn 11, WeWork inked a 304,000-square-foot lease on behalf of Amazon at Vornado’s 330 West 34th Street and Google renewed 297,000 square feet at 85 Tenth Avenue, a property jointly owned by Vornado and Related Companies. Tech leased 3.16 million square feet, the most since 2019, a record-breaking year.
That momentum has continued. Firms are relocating for more space, expanding, renewing and adding locations. West Coast and European companies are opening Manhattan offices. Some companies are purchasing buildings outright.
This year, Amazon added new offices at Property & Building Corp’s 10 Bryant Park and RXR and Walton Street Capital’s 237 Park Avenue. It leased another office through WeWork at Brookfield’s 5 Manhattan West. The company also bought RFR’s 522 Fifth Avenue for $350 million.
Tech submarkets are blurring. Companies that once preferred Union Square, the Flatiron District or Chelsea are now opting for prime buildings over certain locations, brokers said. A looming shortage of those buildings is causing some companies to consider locking in space three to five years before their leases come due, according to Zarba.
“We are getting back to a place very quickly of low supply of quality real estate,” he said. “The quality buildings that these companies sit in have very little supply, and there’s not a whole lot coming online.”
That could be good news for struggling submarkets like Downtown Manhattan and Brooklyn, where many tech workers live.
“I think what we’ll see going forward is that these companies will begin to look at neighborhoods and product types that can more readily satisfy growth requirements,” Zarba said.
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