Brookfield Nears Hudson Square Deal as AI Demand Reshapes NYC Office Market

Brookfield Asset Management is in talks to buy a roughly 10% stake in Hudson Square Properties, the office portfolio that has become a hub for artificial-intelligence companies in Manhattan, the Wall Street Journal reported.

The deal would value the portfolio at about $3.5 billion, according to people familiar with the matter. Hudson Square Properties owns about 6 million square feet of office space in the neighborhood west of SoHo, where tenants include Google and a growing cluster of AI firms.

The investment signals a shift in Manhattan's office market, where AI and technology tenants are absorbing space even as traditional office demand remains weak. Hudson Square has emerged as a preferred location for AI companies, drawn by the area's fiber-optic infrastructure and proximity to tech talent.

Brookfield's interest comes as the broader New York office market faces elevated vacancy rates and falling valuations. The Hudson Square portfolio has outperformed, with occupancy rates above 90%, the Journal reported.

The deal is not yet final and terms could change, the people said. Brookfield declined to comment.

Hudson Square Properties is a joint venture between Trinity Church Wall Street and Norges Bank Investment Management. The portfolio includes 14 buildings, many of which have been redeveloped to meet modern office standards.

AI companies have leased more than 1 million square feet in Hudson Square over the past two years, according to real estate data firm CoStar. That pace of leasing has made the neighborhood one of the tightest office markets in Manhattan.