Tech startups are helping Manhattan’s office market recover

As young tech tenants expand into Manhattan, the borough office market is starting to recover after experiencing a major downturn over the past year and a half.

According to a new report from Newmark, the average age of tech, advertising, media and information (TAMI) companies signing leases in Manhattan has dropped from 16.4 years before the pandemic to 13.2 years during the pandemic.

This year alone, young tenants signed contracts of 567,000 square feet, three times the amount of leases they signed in 2019. In addition, demand from this group has increased by 315 percentage points throughout. of the pandemic.

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“They have received significant venture capital funds, they are doing well and a lot of them want to take advantage of the market and get into better buildings,” said David Falk, president of the Newmark tri-state. “They are looking to invest in business and culture.

These young companies are giving up coworking spaces like WeWork for long-term spaces in Manhattan. In fact, tech startups leaving flexible offices have accounted for 9.3% positive uptake over the past 18 months.

One example is the social media platform TikTok, which has exploded since its founding in 2016. The company recently signed a lease to occupy 232,000 square feet at One Five One at 151 West 42nd Street instead of its WeWork membership. .

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