Emerging Growth Firms Are Driving Manhattan’s Office Resurgence

Emerging firms are driving positive absorption in the New York City office market as the pandemic wanes, with fast-growing firms in the TAMMI industry increasingly beefing up their footprints.

A new report from Newmark shows that demand from emerging TAMI tenants – defined as those who were established less than 10 years ago – has surged as of late, growing by 315 percentage points since the start of 2019. Newmark data suggests that firms like Alloy Freshly, and DailyPay have all grown by more than 1000% from their past locations, while Remarkable Foods, FUBO TV, Affirm and Square have expanded by more than 300%.

Those tenants are also clustering in Midtown South, which has more emerging tenants than both Midtown and Downtown combined. The TAMI sector has also posted the greatest increase in the number of tenants in the market of all industries, surging from 107 in 2019 to 132 as of last month. 

TAMI companies comprise 47.4% of positive absorption since the beginning of the pandemic, according to Newmark data, an increase from 41.4% pre-COVID. Tenants outgrowing co-working spaces (like TikTok and Twitch) comprised 9.3% of positive absorption over the last 18 months, while coworking companies themselves have accounted for far less absorption since the onset of the pandemic (3.8% since March 2020, as opposed to 21.8% of positive absorption in 2019).

“Emerging TAMI firms remain a large portion of the post-pandemic marketplace, and big TAMI firms are still an integral part of New York City’s future,” the report states, noting that Facebook has recently expanded by 730,000 square feet, Apple has expanded by 116,526 square feet and Google has expanded by 58,981 square feet, in addition to the purchase of 550 Washington Street for $2.1 billion.

This suggests “confidence among big TAMI companies in the future of the NYC workplace,” the report continues. “Facebook, Apple and Amazon are also currently in the market for expansion space along with other big TAMI firms, signaling that these tenants will continue to drive growth.”

Growing TAMI firms also accounted for 59.2% of TAMI absorption in 2021, a dramatic uptick from pre-COVID percentages (24.3%).

“TAMI industries both large and small continue to be an integral component of the New York City economy, but emerging companies are growing at a faster rate, building momentum especially in recent months,” the report notes. “Monthly absorption improved in July, then ticked positive in August for the first time since the onset of the pandemic and remained positive in September. Current tenant requirements indicate that the growth trend among emerging tenants, particularly in the TAMI industries, will continue.”