NEW YORK CITY-Anyone who thought 2013's amazing year for technology sector would be short-lived will need to rethink that assumption. According to a new report from Jones Lang LaSalle, the industry had a robust start to the year and is poised to continue building on its momentum. Further, leasing activity in technology may start migrating south.
The city saw 13 technology leases signed in January; those agreements generated 663,276 square feet of activity. Among those were Twitter's inking of 144,000 square feet of space, IBM's 118,4250-square-foot plan to move its Watson Group into Manhattan and MasterCard's 57,978-square-foot lease for a new technology lab.
Tech activity is expected to flourish in the next few months, says JLL's Jim Wenk, EVP. "We don't see any slowdown, it's the highest performing sector in New York and it's a sustainable sector. There are probably six to 10 tenants in the market that will close in the next couple of months."
He makes that prediction as JLL is working with several of the firms in question or it has a relationship with brokers on the deals. Among the prospective tenants and their space needs are Google, which is building out its expansion at 85 10th Ave.; Amazon, 300,000 square feet; Etsy, 100,000 square feet; Usablenet, 100,000 square feet and Mediamath, 95,000 square feet.
Later this year the market likely will see a change in the tech industry's choice of location, Wenk predicts, "Lower Manhattan and Brooklyn will start seeing some leasing from tech firms in the second half of this year."
Partly, the sector is primed for additional growth because it continues to be well-funded. January was the eighth straight month in which more than $200 million of venture capital funds were raised by tech firms, the study notes. A total of 33 transactions worth more than $220 million closed during the month, sending a signal that the rest of the year will likely be strong for technology firms.
"As long as the capital markets stay where they are and the economy continues to improve," Wenk says, we see New York as a direct competitor ot Silicon Valley as a technology hub."
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
