Real estate giant Brookfield is in exclusive negotiations to acquire a stake in Hudson Square Properties, a deal valuing the portfolio at $3.5 billion and further cementing the status of Manhattan's West Side as New York City's latest tech and media hub.

According to people familiar with the matter, Brookfield will take a 10% stake in the 13-building, 6.2 million-square-foot portfolio while also assuming the role of long-term operating partner. The transaction is expected to close in the coming months.

The Hudson Square office district, located south of the West Village and a few blocks from the Hudson River, has seen strong leasing activity over the past year as rapidly expanding technology firms have competed for space.

Demand is being driven in particular by artificial intelligence companies. Anthropic stated last week it had leased an entire 16-story building at 330 Hudson Street, just south of the Hudson Square Properties portfolio. The developer of the Claude chatbot said it expects its New York headcount to more than double by the end of 2026.

Recent transactions for Hudson Square Properties include a new lease signed with PayPal at the end of 2025 for 261,000 square feet.

Data from commercial real estate firm Avison Young shows that since the second quarter of 2025, office vacancy in the Hudson Square area has fallen by 3 percentage points, while asking rents have risen nearly 20% to over $87 per square foot.

This is positive news for Hudson Square Properties, which has positioned itself as a center for technology and creativity. Google opened its 1.3 million-square-foot headquarters nearby in 2024. That same year, Disney also opened its own 1.2 million-square-foot headquarters in the neighborhood.

According to Avison Young, Hudson Square's office vacancy rate was 17.1% in the second quarter, still above the citywide average of 14.1%. In the years following the pandemic, office leasing recovered fastest in buildings near transit hubs like Grand Central and Penn Station. However, as prime space in those areas has filled up, tech companies in urgent need of office space have expanded into other parts of Manhattan.

Brookfield's investment in Hudson Square Properties will make it a partner with Trinity Church and Norges Bank Investment Management. The church's ownership of the portfolio dates back more than 300 years, to a 1705 land grant of 215 acres from Britain's Queen Anne to the parish.

Norges Bank Investment Management, which manages the world's largest sovereign wealth fund, partnered with Trinity Church in 2015 to undertake a comprehensive overhaul of its Hudson Square holdings, transforming the area long associated with the printing industry into a modern creative center.