Tech tenants leased 7.6 million square feet in 2019, almost doubling the 3.9 million square foot total in 2018. This sector’s leasing volume doubled to 18 percent last year. Midtown South has accounted for more than 50 percent of tech leasing in the city for eight of the past 10 years. Last years, biggest tech deals were Google at 550 Washington Street (1.3 million sf), Facebook at 50 Hudson Yards (1.16 million sf) and LinkedIn at 350 Fifth Avenue (501k sf).
Office tenants signed 145 leases in 2019 with starting rents at $100 per square foot or higher. These deals totaled almost 8.8 million square feet (30 percent of all leasing activity in Manhattan), and it broke the record for 138 deals set in 2015. Some neighborhoods with these leases include the Far West Side, Hudson Square, and Bryant Park.
New technology attracts new investors and industries to New York. Buildings are being constructed strictly for life science, where science, technology, and medicine are intertwined. The top industries and employers are now looking for areas where work and play are connected. The workplace is becoming a place where its not just for work anymore, but where people can live their lives. While developers want to maximize profits, they also want to build communities, which means mixing residential and commercial. And technology is a driving force behind getting the “eat, work, play” phenomenon moving. While New York has always been a hot spot for tech, New York can’t take it for granted; it needs to continue to thrive. The city must accommodate the evolving needs and expectations the new generation has in order to remain a hot spot for this sector.
At the end of January, WeWork severed ties with two more companies it had acquired before its failed IPO. Teem, a software company, has joined Conductor, a marketing software firm, and WeGrow, WeWork’s elementary school on the chopping block. The school is closing at the end of 2020. It has also closed operations on another co-working firm Spacious. WeWork has divested its stake in The Wing, which is a co-working startup focused on women. Recently, the company valued its 25 percent stake in The Wing at $58.8 million, however, WeWork has been considering selling its share since October.