Manhattan office tower values plummet below COVID-era slump amid fears AI will wreak a white-collar bloodbath

"Publicly traded landlords with large Manhattan office portfolios are worth less than in June 2020, when the city was grappling with lockdowns and deserted business districts. The shift reflects growing concerns that AI could reshape white-collar employment and ultimately reduce demand for office space across the city."

"Empire State Realty Trust is now valued by the market at about $263 per square foot, slightly lower than the $266 per square foot valuation in mid-2020. SL Green Realty, Manhattan's largest office landlord with about 30 million square feet, is valued at roughly $416 per square foot, compared with $461 per square foot during the early pandemic period."

"A growing number of aging Manhattan office buildings - particularly in the Financial District - have been repurposed into housing as remote work and rising vacancies reshaped the commercial market. The most dramatic example is 25 Water Street, a former JPMorgan Chase office tower transformed into 1,320 apartments, making it the largest office-to-residential conversion in the United States."

Manhattan's office real estate market faces unprecedented challenges as major landlords' valuations have dropped below June 2020 pandemic levels. Publicly traded office portfolio holders are experiencing significant market pressure, with office sector stocks declining approximately 12% in 2026 while broader real estate markets gained 11%. Key players like Empire State Realty Trust, SL Green Realty, and Vornado Realty Trust all show reduced per-square-foot valuations compared to early pandemic periods. The primary concern driving this decline is artificial intelligence's potential to reshape white-collar employment patterns and fundamentally reduce office space demand. In response, aging Manhattan office buildings, particularly in the Financial District, are being converted to residential use, with 25 Water Street representing the largest office-to-residential conversion in the United States.

Read at New York Post