Investors are now valuing Manhattan’s marquee office landlords for less than they did in June 2020, a twist that shows how technology anxiety and stubborn debt pressures have reset the price of prime Midtown real estate. Portfolios owned by SL Green, Vornado and the company behind the Empire State Building are all caught in the downdraft, even after leasing and weekday ridership showed signs of life last year.
An Evercore ISI analysis highlighted by Crain's New York Business found investors were effectively pricing SL Green’s portfolio at about $416 per square foot, down from roughly $461 in June 2020. Vornado’s portfolio was pegged near $291 per square foot, compared with about $364 then, while the Empire State portfolio was estimated around $263 per square foot. The note also pointed to sharp year-to-date share declines for the big landlords and warned that current pricing “implies a prolonged impairment in cash flows,” even if it may be too pessimistic for the best-quality towers.
On Wall Street, the selloff even has a nickname: the “AI scare trade.” As Bloomberg reported, traders dumped real estate services firms and some office REIT stocks in February, spooked by the idea that artificial intelligence and automation could chip away at long-term demand for desk space. Those worries are piling on top of higher borrowing costs and lingering vacancy questions, pulling more building owners into the line of fire as investors try to price in technology risk.
Recovery Hasn't Healed the Market's Scars
On the street, the recovery looks very uneven. Colliers’ monthly snapshot showed that Manhattan leasing slipped in February and the availability rate ticked up for the first time in two years, according to Commercial Observer, suggesting the leasing momentum that built up in 2025 is fragile. At the same time, data from the New York City Comptroller show office attendance and weekday subway ridership moving much closer to pre-pandemic levels, leaving investors and lenders to puzzle over conflicting signals about where the market goes next.
Appraisals, Delinquencies and the Refinancing Cliff
The new pricing reality is hitting the debt side hard. Office CMBS delinquencies have jumped, and several large towers have been reappraised far below their prior values, highlighting how quickly asset values and loan collateral can diverge. Data tracked by Trepp and reported by Wolf Street show one major Midtown tower was revalued at only a fraction of its legacy appraisal, and market notes have pointed to nearly 40 percent valuation drops at parts of the New York Times Building that are owned by Brookfield. For a local roundup, see Norman Bobrow.
Where Owners and Buyers Go From Here
Analysts, along with at least one bank note cited in the reporting, expect funds from operations to soften for the office-tower sector this year, a forecast that Crain's New York Business noted in its summary of the Evercore work. That helps explain why landlords are leaning into tenant-improvement upgrades, offering richer concessions and moving more aggressively to sell selected assets. Some investors are circling what they see as bargains in top-tier, well-located buildings, while others are bracing for a longer stretch of tight cash flow and debt workouts, leaving Manhattan’s office market stuck in a cautious, two-speed recovery.
For New Yorkers, the stakes are not abstract. A rebound in foot traffic and leasing has not settled the bigger questions about long-term demand, heavy debt loads and how new technology will reshape the way companies use space. Expect more valuation flare-ups, refinancing fights and conversion debates as the market slowly sorts out winners and losers across Manhattan’s office skyline.
