New York, NY (PRWEB) June 03, 2014
Turnkey Office Space, an office space search service, recently released a statement commenting on the need for open-plan, collaborative, Class B and C office spaces in New York City for High Growth Industries (HGIs). Company executives believe that due to a booming first quarter economy in New York City, the predicted growth of HGIs will indeed occur.
According to a May 28, 2014 Staten Island Live article titled, “New York City economy thriving, city comptroller says,” by Maura Grunlund, the highest number of New Yorkers are currently employed since 2000, leading to a “booming commercial real estate market.”
Co-founder Jonathan Bachrach believes that this recently reported growth is moving at a much faster pace than expected. “When the ‘Commercial Real Estate Competitiveness Study’ was released by late last year there was a prediction of business growth but, we never expected to see growth like this. With New York City’s economy growing faster economically than the nation’s, there is real concern for the HGI commercial real estate space.”
Bachrach, who is referencing a past December 2013 study titled, “Commercial Real Estate Competitiveness Study”, prepared by Alvarez & Marsal Real Estate Advisory Services and JRT Realty Group, Inc. for the New York City Economic Development Corporation, believes HGIs will represent the majority of growth for office space in major cities such as New York over the next 10 years. With the first quarter reports, he sees the results of this study being significantly accelerated.
According to the study, HGIs are broken up into 7 sectors: Healthcare, Education, Technology, Advertising, Business Services, Consulting, Non-Profit, and R&D. These sectors are projected to account for 60% of growth in total office space demand between 2013 and 2025.
Bachrach believes that with this recently reported first quarter growth, the demand for Class B and C office space will increase quicker than expected. "A lot of High Growth and tech firms are still in the early stages of their growth and are thus preferring class B and C spaces as opposed to higher end office space typically used by the Finance, Legal Services and Accounting sectors,” exclaimed Bachrach. “A company in a growing industry is not going to plunge straight into the best building in the area. Think about tech start-up companies; they are actively growing, but still have a certain level of risk.”
The study also found that New York City could experience a demand-supply gap in the future as real estate developers may decide to build more residential buildings over commercial buildings due to more favorable returns. While the industry has not yet reported this after first quarter, Bachrach believes that this, along with the financial status of most HGIs, will lead to a shift in what the traditional office space looks like.
To compete for top millennial talent, companies are also changing their mindset on what the office looks like, according to a November 10, 2013 article by the New York Times titled, “Embracing the Millennials’ Mind-Set at Work.” HGIs are meeting the demands of millennial workers by building out these class B and C workspaces to offer more collaboration.
“Open-plan, collaborative build-outs are increasingly becoming the norm for high growth startups and tech firms,” said Bachrach. “Since these industries are projected to represent the majority of growth in demand for office space in the future, the tendency toward the collaborative, co-working-type build-out is likely to continue.”
About Turnkey Office Space:
Turnkey Office Space is a countrywide search and consulting services for companies seeking office space. They specialize in office suites, virtual offices, and co-working spaces. Turnkey can be reached via their website http://www.turnkeyofficespace.com and by phone at 1-888-282-8555.