Tech activity has seen significant increase since 2000, as it continues to have a big impact on the landscapes and economies of cities all over the world. Tech hubs are changing fast to be at bar with the invasion of tech companies.
The following are some of the impacts of tech companies on the real estate landscape in NYC.
• Diminishing supply, more competition, and high prices
According to CB Insights, a lot of money is being invested in the New York scene. For instance, series B financing saw an increase of $17 million this year as opposed to the $6 million recorded in 2013. Tech companies are now making a huge change in the commercial real estate market. Last year, the tech industry contributed over 19% of the leasing that took place. Tech startups have taken up almost half of the bids in NYC neighborhoods like Union Square, Chelsea, and Flatiron. Rent has also gone up by 80% compared to how it was ten years ago.
• Increased demand for bespoke office spaces
According to Crain’s, HR professionals are mostly interested in the company culture and engagement that is characterized by the company’s space. Tech companies are now approaching property owners and requesting for non-traditional office space with open floor plans, exposed brick wall, and loft spaces with rooftops. Landlords are now polishing up their property to suit these needs and help tech startups to gorge for talent and achieve a collaborative atmosphere.
• Creating new perspectives in old neighborhoods
The Garment District is a perfect example of how the tech boom has changed NYC. Some years ago, it only had fashion designers and garment manufacturers, but currently technology and other creative companies have settled in the area. It is attributed to the area’s transit options and relative rent prices. Flatiron area has also become a haven for tech startups. These areas now have new bars, restaurants, and retail stores to meet the needs of the tenants.
• Creation of “hotspot” residential neighborhoods
The tech people also need a place to settle in. While some can afford to live in the popular and expensive areas, the rest opt to settle in the surrounding areas that are less developed. This invasion of educated people eventually makes the less developed area a hotspot and attracts new businesses and developments.
Technically, when a tech company moves into a new city, the landscape of that part is likely to change.
Town Residential is a NYC apartments for sale and services firm based in New York. Andrew Heiberger founded it in 2010. Town Residential deals in leasing, luxury residential sales, and marketing of property developments.