Yesterday’s news – Amazon decided to pull the plug on its plans to create a second headquarters in New York. Today’s news – Amazon just this last week signed a lease for 335,000 square feet of office space in the newly minted Hudson Yards.
Amazon is not the only tech giant to spread its wings in NYC. Google is expanding its reach beyond Chelsea and its 3.2M square feet of space there and Facebook is gobbling up three buildings in Hudson Yards of approximately 1.5M square feet to add to its already 2.4M square feet of office space in the Big Apple.
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Take a look at Manhattan’s Top Office Tenants, according to Cushman Wakefield:
- WeWork – $8.2M square feet
- JP Morgan Chase – 5.3M square feet
- Citigroup – 3.9M square feet
- Morgan Stanley – 3.6M square feet
- Bank of America/Merrill Lynch – 3.5M square feet
- Google – 3.2M square feet
- Bank of NY Mellon – 2.5M
- Facebook – 2.4M square feet
- Warner Media – 2.4M square feet
Even before the latest leases signed by Facebook and Amazon, TAMI tenants (Tech, Advertising and Media Industry tenants) represent approximately 24% of Manhattan’s office space compared to the 31% of Manhattan’s office space taken by financial services.
To break down office space tenancy even further, look at these stats, again according to Cushman Wakefield:
- Financial services – 30.4%
- TAMI – 24.3%
- Public sector – 10.8%
- Legal Services – 8.5%
- Retail/wholesale – 7.1%
- Professional services – 6.8%
- Real estate – 4.8$
According to Cushman Wakefield’s economist, Ken McCarthy, “You’ve got a bunch of tech companies across the country that are looking for talent and fighting a war for talent against their local competitors. One way to tap into that (talent pool) is to come to markets like New York…” where there is a pool of talent and venture capital firms that are pushing tech firms to expand in Manhattan.
The landlord responsible for Amazon’s latest lease at Hudson Yards, Mark Holliday, the CEO of SL Green Realty Corp., said, “We know they (Amazon) isn’t done yet. These West Coast companies are migrating to the East Coast in order to tap in to an expanded workforce that doesn’t really exist to the same degree in Silicon Valley.”
Obviously, other real estate experts agree with Holliday. Earlier this year, Savills ranked New York City number one among 30 global tech cities. What drove that number one ranking? Venture capital cash and an in-depth pool of tech talent.
Thanks to BloombergNews’ Natalie Wong for source data.