REALSHARE NEW YORK

(Mark Your Calendars: RealShare New York 2011, October 12 in New York).

NEW YORK CITY-As venture capital funding flows into New York City and the city continues its efforts to nurture startups and establish itself as a tech-friendly environment, VC firms and tech start-ups are increasingly seeking real estate in the city. However, those space needs usually start off relatively small, sources tell GlobeSt.com.

For Q2 2011, according to data from the National Venture Capital Association and PricewaterhouseCoopers, $624 million in funding poured into the New York metro area. This marked an increase of $154 million from the same period a year earlier.

“My sense is they’re not opening offices that require great amounts of space--they’re probably opening offices that house a handful of partners to manage the New York relationships,” Emily Mendell, a spokesperson for the NVCA tells GlobeSt.com. “We probably won’t see a massive flood gate of VC firms flocking to New York but I do think there will be probably several more firms looking for office space there.”

One of the latest, New Enterprise Associates, revealed recently that it will open a location in New York to City to “serve its growing portfolio in the region,” according to a news release. NEA funds a number of companies located in the city, including Gilt Groupe, which received the largest amount of funding from venture capital for an outfit in New York City in Q2 2011. Gilt Groupe received a total of $138 million for the quarter.

A spokesperson for Gilt Groupe tells GlobeSt.com that it has recently expanded the space it occupies at its 2 Park Ave. headquarters. The company has two additional offices in Manhattan. According to a news release about the funding, Gilt Groupe plans to use the funding for expand its current operations.

Brendan McGee, the New York City regional manager for TechSpace, which offers office space and administrative services to companies and individuals, says that he has seen increased demand from VC clients and the tech companies they’re funding.

“We’re close to fully occupied at all three New York City locations, so I’d definitely say our demand is high,” McGee says. Those locations include Chelsea, the West Village and Union Square. Rents vary, ranging from $1,200 a month for a 100 square foot space to $20,000 for a 35 person office suite. Prices include administrative IT support staff.

Past clients in New York City, McGee says, include Pandora, LinkedIn and Trulia, which just left because it had outgrown the space.

“We have a lot of VC-funded companies in-house, the reason being that the VCs feel comfortable putting their companies into our space knowing that they’re going to be serviced and staffed and taken care of,” McGee says, adding that they’ll often start off in smaller spaces and then grow and require additional space. “They’ll start off in a small two person shop and then once they hit a certain point--a certain employee headcount--it just makes sense to get their own space.”

Mendell, at the NVCA , says that she anticipates continued growth in the New York City market. She agrees that space needs tend to start off small. “My sense is they’re not opening offices that require great amounts of space,” she says. “They’re probably opening offices that house a handful of partners to manage the New York relationships.”

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