Tech firms fuel Midtown South rent hikes: report

Growth seen as sustainable as large companies buy in

New York /
Jul.July 03, 2014 04:05 PM

Average asking rents in Midtown South have nearly closed the gap with those in Midtown, according to a new report from CBRE Group.

Rent growth in Midtown South averaged 13 percent per year between 2010 and 2013, in line with past spikes in 2000 and 2008, Crain’s reported. CBRE believes that growth is more sustainable this time around as established tech firms such as Twitter and IBM Watson lease space in the neighborhood.

While more established IT firms move into the neighborhood, CBRE reports that start-up tech firms are moving out. One issue: landlords can be wary of renting to the unproven businesses, who often require short-term leases and other special accommodations, as The Real Deal previously reported.

As rents rise, budget-conscious nonprofits are also exiting Midtown South, leaving 4.1 million square feet of vacant space in their wake, Crain’s reported. Retail and financial firms have also scaled back their presence, freeing up 2.53 million feet and 2.99 million feet, respectively.

The wave of commercial leasing parallels a residential boom. Midtown South’s population increased 9.2 percent between 2000 and 2010, well above the 2.1 percent growth rate for the city, reported Crain’s [Crain’s]Tom DiChristopher


Related Articles

arrow_forward_ios
Eric Gordon
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
What will proptech look like in 2019 and beyond?
What will proptech look like in 2019 and beyond?
What will proptech look like in 2019 and beyond?
Airbnb CEO Brian Chesky (Getty)
Airbnb’s losses balloon to $4.6B in 2020
Airbnb’s losses balloon to $4.6B in 2020
From left: Fifth Wall’s Brendan Wallace, Tishman Speyer’s Rob Speyer, Social Capital’s Chamath Palihapitiya, Cantor Fitzgerald’s Howard Lutnick, Pershing Square Capital’s Bill Ackman and Opendoor’s Eric Wu
Making sense of the SPACe race
Making sense of the SPACe race
Clockwise left: Sam Zell, Spencer Rascoff, David Simon, and Russell Galbut
The definitive real estate SPAC tracker
The definitive real estate SPAC tracker
Matterport CEO RJ Pittman (Getty)
Real estate VR tech firm Matterport to go public via SPAC
Real estate VR tech firm Matterport to go public via SPAC
(iStock/Illustration by Alexis Manrodt for The Real Deal)
Global real estate investment bounced back in Q4
Global real estate investment bounced back in Q4
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...