Two artificial intelligence firms have signed leases in SL Green office towers on either side of East 24th Street in Midtown South, bringing both properties to 100% leased.
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Harvey AI, a domain-specific AI tool for legal and professional services, signed a 93K SF expansion at the office giant’s One Madison Ave., bringing its total footprint in the building to 185K SF.
And on the next block over, AI sales company Clay signed for 163K SF at 11 Madison Ave., according to releases from the landlord.
Demand from tech firms has been a driver in Midtown South in particular, Steven Durels, SL Green’s executive vice president and director of leasing and real property, told Bisnow.
“It's great to be a landlord,” he said. “I’m tight as a drum as far as availability goes in that submarket.”
The tech sector’s leasing activity is a marked pivot from just a couple of years ago.
While the 30-story, 2.3M SF skyscraper at 11 Madison Ave. was 96% leased at the end of Q1 2024, it was a different story at One Madison.
The 27-story, 1.4M SF tower was just 64% leased two years ago when Midtown South was a much quieter market with an 18.6% availability rate, Colliers data from February 2024 shows.
“If you rewind the tape a little bit, 2023, even ‘24, Midtown South was a pretty quiet submarket,” Durels said. “A lot of the tech tenants had started to pull back from the market.”
But the submarket’s availability rate is now far tighter, hitting 13.3% last month, according to Colliers.
The demand looks to have been particularly favorable for SL Green. The landlord said in a release it expects to sign 900K SF of leases before the end of the quarter.
“Our incredible first quarter — likely the best in our entire history — has been driven by large, long-term commitments from sophisticated companies,” SL Green Chairman and CEO Marc Holliday said in a statement. “This momentum makes clear that New York City will be a net beneficiary of growth in Tech and AI.”
JLL’s Paul Glickman, Alex Chudnoff, Ben Bass and Diana Biasotti represented SL Green in the Harvey AI deal, with the brokerage’s Joseph Messina and Todd Stracci repping the tenant.
Newmark’s Aaron Ellison, Derek Feinman and Adam Spector represented Clay, while colleagues Brian Waterman, Brent Ozarowski and Erik Harris represented the landlord.
Brokers on the deals did not respond to requests for comment.
