New York City has the fastest growing tech community in the United States. New York’s “Silicon Alley,” the aptly named, ever-expanding tech community, is often compared to the West Coast’s Silicon Valley. Given the rapid expansion across the city, tech tenants are seeking unique and affordable work space where they can establish a brand identity and potentially expand into the future. As tech companies grow and gain investor interest, rents in previously affordable areas are rising. So what does this mean for the New York City tech community?
A recent study reported a disconnect in the city between commercial real estate brokers and tech tenants. According to a survey of 50 New York tech startups by New York-based real estate marketing and research firm RE:Tech, “one third of New York’s tech startups have never been contacted by a commercial real estate broker.” The report, RE:Tech Snap Shot, illustrated the need for brokers to reach out early and often while guiding startups through the complicated real estate process.
The report conclusions and recent articles indicating that Silicon Alley companies are largely ignored by commercial real estate firms defines an audience primed to be the direct beneficiaries of a concerted effort by JLL to simplify the space search process. This week, JLL’s New York office will launch the square: TECH, a microsite created and powered by JLL, designed to assist tech companies of all sizes in their pursuit of work space in and around the city.
The site walks users through an intuitive work space journey across three separate growth stages: Start Up, Ramp Up and Speed Up. The Start Up section is designed for companies that are ready to move out of the home office or local café, and establish a professional environment that can support the growth of the business. The Ramp Up section targets firms that may be ready to expand the business, grow their employee base and/or enter the market for funding. Lastly, the Speed Up journey is aimed at thriving tech companies with a proven business model that may be seeking acquisition or posturing to unseat today’s leading tech conglomerates.
New York’s tech sector is one of the most active industries in the city. Employment growth in the industry regularly outpaces total nonfarm and private sector employment. Tech has also been a key-driver behind post-recession office-using employment growth; tech employment has grown by 46 percent since 2009.
Venture capital funding—currently at its highest level since the dot-com era of 2000—continues to pour into the New York metro area, largely due to the opportunity for innovation that exists between tech and the city’s core industries of finance, media and advertising. Of the $5.6 billion in venture capital raised through the third quarter of 2015, 82 percent, or $4.6 billion, went to tech startups.
Get smart on the issues impacting your next work space decision: www.jll.com/thesquare