🚨 Salesforce added 71,000 sq. ft. in New York (a 25% expansion to 310,500 sq. ft.), signaling selective tech re-growth in Class A towers. Tech’s leasing share rose from ~14% (2023) to ~18% (2024) and ~16.5% in Q1 2025 (~8 MSF of ~48 MSF), concentrating demand in trophy assets. With NYC Class A asking rents near ~$82 psf, owners with credit tech tenants can defend NOI and improve lender narratives despite broader office slack.
Salesforce NYC footprint: 310,500 sq. ft. after +71,000 sq. ft. expansion (25%), Sept 2025.
Tech share of U.S. office leasing: ~18% (2024 full-year) vs 14% (2023); ~16.5% in Q1 2025 (~8 MSF of ~48 MSF).
Manhattan Class A asking rent: ~$82 psf, Q2 2025.
Loan Performance. Class A cash flows with expanding tech tenancy support DSCR and reduce refinance friction; rising rent floors and low downtime help offset elevated coupons. Weak B/C assets remain cap-rate/NOI trapped.
Demand Dynamics. Flight-to-quality: expansions cluster in amenitized cores; renewals/backfills outpace true net new in secondary stock. Concessions narrow in prime, widen elsewhere.
Asset Strategies. Front-load TI for collaborative buildouts; sequence capex to near-term expansions; compress downtime with turnkey “innovation floors.” Re-stripe OPEX to support higher density and 24/7 access.
Capital Markets. Best paper targets prime collateral with credit tech; banks/insurance portfolios bid selectively; CMBS prints favor trophy, with structure (cash traps, reserves) for roll-over risk.
Rates still high, but quality NOI is clearing.
Trophy/Class A outperforms; commodity offices lag.
Finance prime with structure; avoid chasing yield in weak rent-beta.
Spreads/terms favor credit tenants; watch reserves and rollover covenants.
🛠 Operator’s Lens
Refi. For stabilized Class A, pursue extension/refi with flexible prepay; document tech pipeline to support DSCR and value.
Value-Add. Tie TI to signed expansions; carry 10–15% contingency for specialized buildouts.
Development. Sensitize pro formas to slower lease-up outside cores; stage GC/FF&E for phased occupancy.
Lender POV. Price to tenant credit and building quality; require rollover reserves, TI/LC escrows, and evidence of tech demand.
Policy/Rates: Fed easing path (as tracked in your rate deck) could lower coupons—confirmation would unlock more refi/acquisition flow.
Market Confirmation: Watch Q3–Q4 Manhattan leasing and CMBS conduit prints for prime assets to validate cap-rate stability.
Risk: Tech hiring or AI capex slowdown would soften expansions; secondary assets face higher vacancy/concession pressure.
September 14, 2025 (America/Chicago). CoStar News; Cushman & Wakefield.
Tech Share of U.S. Office Leasing (2023–Q1 2025)
