AI Anxiety Sparks a Lowering of Values of Manhattan Office Real Estate by Investors
Concerns over the increasing push for the use of artificial intelligence (AI) has led to investors lowering the value of Manhattan office real estate. The article by Crain’s New York noted that real estate investment trusts (REITs) SL Green Realty and Vornado Realty Trust were recently valued by investors at less than in June 2020 according to a new report by brokerage firm Evercore ISI. It is feared by investors that the growing use of AI will make “much of the white-collar workforce redundant and crush demand for space in Manhattan’s office buildings,” and as a result, “the prevailing wisdom among them is that the future for office buildings is grim again.” Shares in Vornado and SL Green are reportedly down this year by 14% and 11% respectively, while Empire State Realty Trust (ESRT) is down 12%. A March 1 report by Bank of Montreal analysts reportedly “advised that the fundamentals for office towers remain ‘lackluster,’” additionally stating that “funds for operations, a proxy for cash flow, are expected to fall by 7% for the sector this year.” However, in contrast, a report released in February by the New York City Comptroller’s office said that “New York’s ‘fairly robust’ office recovery continued in the first weeks of 2026. Weekday subway ridership rose last year, to 80% of pre-pandemic levels, as more workers returned to offices.”