AI Boom Brings Hope To Long-Vacant Morgan North Redevelopment

In spite of a supposed scarcity of top-tier Manhattan office space, a full-block, Class-A space right next to Hudson Yards has sat empty since before the pandemic. But with the artificial intelligence boom fueling a comeback of tech companies seeking NYC offices, its new leasing team is bullish it might finally land a whale.

Tishman Speyer’s redevelopment of the top floors of Morgan North — the art deco landmark at 351 Ninth Ave. that houses a massive U.S. Postal Service shipping center — landed Japanese advertising firm Dentsu in 2019 for 320K SF. But the firm never moved in after the pandemic shifted its plans. 

Even as tenants have battled for best-in-class office space elsewhere in the city, there have been no takers for the nearly 650K SF of freshly created office space at Morgan North.

Dentsu has listed its floors on the sublease market since 2020 with CBRE, but this month it hired Newmark for a fresh marketing push. 

Newmark Tri-State Region President David Falk, who is leading Dentsu's new representation with Vice President Peter Shimkin, said the market is ripe to score a big-name tenant.

“When Covid happened, for five years, tech and media was kind of shut down,” Falk told Bisnow during a building tour Wednesday. “A lot of the activity today is from tech.”

Nearly 30 AI companies signed leases in New York City in 2025, according to JLL, as tech firms helped spur the best year for the office market since before the pandemic. Tech firms in the city raised $51B in venture funding, a 66% jump over 2024, according to JLL, presaging future demand.

Anthropic, the firm behind the Claude AI program, is reportedly looking for an office between 250K SF and 450K SF when its less-than-20K SF lease at 155 Sixth Ave. expires this year.

Morgan North could benefit as one of the few options with vast, contiguous floor plans starting at 70K SF, Shimkin said. The block-long building has floor plates between 100K SF and 200K SF and ceiling heights as high as 17 feet on some floors.

Shimkin and Falk have already been on five tours with brokers for tech tenants since taking over the marketing contract for Dentsu’s space at the start of January. Their team has already received two proposals from tenants after those tours, Shimkin said, declining to name names.

Tishman Speyer took over the top six floors of Morgan North in October 2019, starting a new chapter for the historic building, which used to take in packages directly via second-floor train tracks connecting to the railroad that today forms the High Line. It signed a 99-year lease, paying $19M a year at the start of the contract.

Envisioning tech, media and advertising tenants as occupants, Tishman — which developed and nearly leased up the $3.6B Spiral a few blocks northwest — created open-plan office floors with exposed brick, a hotel-style lobby on 30th Street and the largest rooftop park in Manhattan.

Dentsu signed a prelease a month later, planning to move in by 2023 to consolidate its New York City footprint from 750K SF spread across four locations to one central hub, Dentsu Vice President of Real Estate Facilities Chris Bendowski told Bisnow.

But then, the pandemic hit. Dentsu put its space up for sublease a year after signing, ultimately moving its workers into a 150K SF spread at 150 E. 42nd St.

“Our real estate strategy priorities changed and changed the way we worked,” Bendowski said. “The space was no longer viable.”

CBRE did everything it could to find subtenants for Dentsu’s space, Bendowski said, but struggled because creative and tech tenants were among the workers with the most flexible return-to-office policies. CBRE didn’t respond to a request for comment.

“The market was a little bit depressed,” Bendowski said. “Tenants in the market weren't serious.”

Tishman Speyer, which is marketing the other 300K SF in the building through its in-house brokers, also never signed contracts for the three available floors. Tishman Speyer declined to comment.

Morgan North’s layout is suited to creative, collaborative tenants. 

With the exception of the windows facing out onto the new terraces, the office floors still have the building's original windows, which are large and bathe the space in natural light. The upper floors have mostly uninterrupted views of the horizon and landmarks including the Chrysler Building. 

Before the pandemic, Chelsea was a magnet for tech companies, spurred on by Google's multibillion-dollar campus in the neighborhood. But it has lagged other submarkets during this comeback run.

Tech tenants signed 1.4M SF of leases around Grand Central in the first half of 2025, according to a recent report from JLL. Two other transit-dense areas, Union Square and the Penn District, were the next-most popular submarkets, notching 1.3M SF and 658K SF of tech deals, respectively.

Chelsea office landlords leased just 218K SF to tech tenants over the same timespan, according to JLL.

Another nearby development targeting a similar tenant base — L&L Holding Co. and Columbia Property Trust’s joint venture at Terminal Warehouse — has also struggled to find tenants.

That former industrial space in Chelsea, which developers began revamping shortly before the pandemic, delivered empty last year. It signed its first deal in October, when flex space provider Convene signed for 50K SF.

But with Hudson Yards just a few blocks north and a plethora of cafés and restaurants in Chelsea Market in the other direction, Falk and Shimkin said the right building and amenities can overcome a slightly longer commute.

“When a building speaks to that tenant's brand, sometimes they don't care where it's located,” Shimkin said. “That combination between the brick work, the ceiling heights and the outdoor space — they sacrifice location for that if it speaks to their brand.”