{"id":1004275457,"date":"2018-10-30T05:48:40","date_gmt":"2018-10-30T13:48:40","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004275457"},"modified":"2022-12-08T13:41:33","modified_gmt":"2022-12-08T21:41:33","slug":"tech-office-leasing-in-nyc-continues-at-torrid-pace","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/tech-office-leasing-in-nyc-continues-at-torrid-pace\/","title":{"rendered":"Tech Office Leasing in NYC Continues at Torrid Pace"},"content":{"rendered":"

By Scott Baltic, Contributing Editor <\/em><\/p>\n

\"Nicole<\/a>

Nicole LaRusso, director of research & analysis for the Tri-State region, CBRE<\/p><\/div>\n

Office leasing in Manhattan by tech companies exceeded 1 million square feet for the ninth consecutive year, hitting 1.6 million square feet through the third quarter, according to CBRE. The data comes from the company\u2019s latest annual Tech-30 report, which measures the tech industry\u2019s effects on office rents in the 30 leading tech markets in the U.S. and Canada.<\/p>\n

\u201cDemand from tech companies in New York City remains robust, with over 1 million square feet of active requirements, more than 20 percent of the demand for spaces of 50,000 square feet or larger<\/em>,\u201d Nicole LaRusso, director of research & analysis for CBRE\u2019s Tri-State region, said in a prepared statement. \u201cSupply remains limited, which combined with strong demand from start-up, mid-sized and the most sophisticated tech companies, makes market conditions favorable for landlords<\/em>.\u201d<\/p>\n

The driving force behind this kind of demand, nationwide as well as in New York, is of course tech job creation. New York City has seen 12.4 percent growth in tech jobs over the past two years, which followed a 25 percent increase during the prior two years.<\/p>\n

\"Colin<\/a>

Colin Yasukochi, director of research and analysis for the San Francisco Bay Area, CBRE<\/p><\/div>\n

And this has shown up in rents, according to CBRE: \u201cDespite an overall citywide rental rate decline of 1.4 percent from the second quarter of 2016 through the second quarter of 2018, technology tenants are willing to pay higher rents in desirable Manhattan submarkets<\/em>.\u201d<\/p>\n

For example, the supply-constrained Midtown South submarket remains the most desirable location for tech companies in New York City, pushing tech taking rents to an average of $88 per square foot as of the second quarter of 2018, a 27 percent premium over the overall Midtown South average taking rent.<\/p>\n

\u201cIn New York, where tech companies are finding it harder to find space in Midtown South, we\u2019ll continue to see migration of the tech industry across Manhattan, especially Downtown and into Midtown\u2019s submarkets proximate to Midtown South<\/em>,\u201d LaRusso predicted.<\/p>\n

Notable recent tech leases in New York include Riskified solidifying its temporary lease at 220 Fifth Ave<\/a>. and aiming to eventually occupy three full floors for more than 27,000 square feet, in the Class B building. More recently, SeatGeek took 72,800 square feet across four full floors at 902 Broadway<\/a>, which it will occupy as its new headquarters, starting next summer.<\/p>\n

Same trends, national context<\/h2>\n

Eight of the Tech-30 markets posted rent growth of 10 percent or more between the second quarter of 2016 and the second quarter of 2018, CBRE reported.<\/p>\n

Interestingly, the top four tech headquarters markets\u2014the San Francisco Bay Area, Seattle, Boston and New York\u2014are feeding each other, with cross-market expansion between them accounting for about 14 million square feet. New York especially has benefited from this phenomenon, with major tech companies based in the Bay Area, Seattle and Boston taking 4.5 million square feet of office space in New York over the past five years.<\/p>\n

\u201cAs space availability in top tech submarkets continues to tighten, we expect large tech companies to continue to expand outside their headquarters markets\u2014including further into secondary and even tertiary markets. Large tech company expansion into smaller markets will help foster innovation clusters, further boosting job creation and creating additional office demand<\/em>,\u201d Colin Yasukochi, director of research and analysis for CBRE in the San Francisco Bay Area, said in a prepared statement.<\/p>\n

CBRE noted that the high-tech software\/services industry accounts for one-fifth of all leasing in the North American office market.<\/p>\n

Images courtesy of CBRE<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Office leasing in Manhattan by tech companies exceeded 1 million square feet for the ninth consecutive year, according to CBRE.<\/p>\n","protected":false},"author":882,"featured_media":1004275496,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21784,21808,1600,21742,10,21747],"tags":[32789],"class_list":["post-1004275457","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brokerage","category-featured","category-new-york","category-latest","category-northeast","category-office","tag-cbre"],"acf":[],"yoast_head":"\nTech Office Leasing in NYC Continues at Torrid Pace - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/tech-office-leasing-in-nyc-continues-at-torrid-pace\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tech Office Leasing in NYC Continues at Torrid Pace\" \/>\n<meta property=\"og:description\" content=\"Office leasing in Manhattan by tech companies exceeded 1 million square feet for the ninth consecutive year, according to CBRE.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/tech-office-leasing-in-nyc-continues-at-torrid-pace\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2018-10-30T13:48:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T21:41:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/10\/Nicole-LaRusso.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/tech-office-leasing-in-nyc-continues-at-torrid-pace\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/tech-office-leasing-in-nyc-continues-at-torrid-pace\/\",\"name\":\"Tech Office Leasing in NYC Continues at Torrid Pace - 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He started writing about CRE in 1988 for a group of Chicago-based publications and in 1989 became the editor of Midwest Real Estate News. After moving on from there in 1991, Baltic continued writing occasionally about real estate, for publications like the Chicago Sun-Times, National Real Estate Investor, Urban Land, Shopping Center World and Architect\u2019s Newspaper. 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