As young tech tenants expand across Manhattan, the borough’s office market is starting to recover after experiencing a major downturn over the last year-and-a-half.
According to a new report by Newmark, the average age of technology, advertising, media and information (TAMI) companies signing leases in Manhattan has dropped from 16.4 years old pre-pandemic to 13.2 years old during the pandemic.
This year alone, young tenants have signed 567,000 square feet in deals, which is three times the amount of leases they signed in 2019. Additionally, demand from this group grew by 315 percentage points throughout the pandemic.
“They received significant venture capital money, they’re doing well and many of them want to take advantage of the market and get into better buildings,” said David Falk, tri-state president at Newmark. “They’re looking to make investments into the company and culture.”
These younger companies are forgoing coworking spaces like WeWork for long-term spaces in Manhattan. In fact, young tech companies moving out of flexible offices accounted for 9.3% of positive absorption over the last 18 months.
One example is social media platform TikTok, which has blown up since its founding in 2016. The company recently signed a lease to take up 232,000 square feet at One Five One on 151 West 42nd Street in lieu of its WeWork membership.
