These days, you pay less in an iconic building like the Grey Bar Building (420 Lexington Avenue), which is attached to Grand Central Station, than you would in a cool loft space in Union Square or in the Flat Iron district.
New York City, NY (PRWEB) August 30, 2013
Unprecedented things are happening in Gotham and it’s all Tech. According to Andrew Stein, Principal of Vicus Partners, Downtown New York City Affiliate of ITRA Global, “Tech firms, which previously stayed put in the Silicon Valley and left New York to the financial firms, have begun putting down roots in Manhattan and the impact is being felt in the market.”
In the first quarter of this year, technology, media and information firms took more space than financial companies. This is a first in the history of the NYC office leasing market. Further, pricing is being turned on its head. Previously popular buildings are suffering from high vacancy rates, and previously less popular buildings are boasting sky-high rents. “These days, you pay less in an iconic building like the Grey Bar Building (420 Lexington Avenue), which is attached to Grand Central Station, than you would in a cool loft space in Union Square or in the Flat Iron district. Loft spaces in these downtown areas previously rented for $30 a square foot, and are now commanding almost twice that”, states Stein.
Tech firms are young, hip, and entrepreneurial, and don’t want to be in a stuffy building on Madison Avenue, jammed into an elevator with a bunch of suits. They want to be in cool buildings with big windows and high ceilings, and they want to be with similar companies. There is evidence of in Union Square, the Flat Iron District, the Meat Packing District, Soho, Tribeca and Hudson Square. These areas were always destinations for creative firms but now are the epicenter of the burgeoning tech movement. As a result, vacancy is down and rents are up. As an example, Union Square has the lowest vacancy rate of any sub-market in Manhattan.
Tenants in these areas include blue chip names like Google and Yelp, a variety of tech incubators, educational plays like General Assembly, and West Coast power-houses who suddenly want to be in NYC. These companies that are out to change the world have already changed the face of NYC commercial real estate.
Other popular technology companies, such as blogging platform Tumblr, which recently moved its office to 21st and Park in Flat Iron, and Foursquare, which calls 568 Broadway (at Prince Street) home, are also contributing to the tech real estate boom. Interestingly, two of the techs biggest names, Facebook and Twitter, are currently occupying space near Grand Central, at 335 and 340 Madison Avenue, respectively – with Twitter occupying Facebook’s former space at 340 Madison.
It remains to be seen whether Facebook and Twitter’s move back up to Madison Avenue, which was previously known as the hub of the advertising industry, will spawn another wave of change. But for now, it seems that midtown south and the cool neighborhoods that abut it are the place to be – and be seen.
ITRA Global is the largest commercial real estate organization devoted to representing corporate tenants and buyers. With coverage in major markets around the world, ITRA Global consists of seasoned professionals with an average of twenty years’ experience and is differentiated by its focus on advocacy for the corporate tenant and buyer. Clients benefit by having an experienced professional as their trusted advisor -- conflict-free representation with total objectivity.
For more information about New York’s vibrant technology market City, contact Bert Rosenblatt or Andrew Stein at 1.212.880.3747.