Rise of tech tenants changing office market

From left: Yahoo's Marissa Mayer, Facebook's Mark Zuckerberg and Seth Pinsky
From left: Yahoo's Marissa Mayer, Facebook's Mark Zuckerberg and Seth Pinsky

The rise of the technology and creative industries in the New York office market mean many of the tenants of tomorrow won’t Be Looking For The Pricey Park Avenue space that used to accompany success — and the de Blasio administration must take heed, leaders said.

Developers, business leaders and policy experts are pushing mayor-elect Bill de Blasio to advocate for office space that reflects the new realities of the city’s economy- specifically, a shift away from the large, pricey spaces that are favored by legal and financial tenants and toward more affordable smaller and mid-sized spaces, the Wall Street Journal reported.

“That really is going to be one of the major challenges for the de Blasio administration,” Seth Pinsky, former president of the New York City Economic Development Corporation and now a top executive at RXR Realty, told the Journal. The solution “partially lies in the traditional existing business centers, but it can’t entirely be accommodated in those areas,” he added.

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Indeed, the city will need about 52 million square feet of new office space by 2040, according to the city’s Independent Budget Office.

A spokesperson for de Blasio told the newspaper that the mayor-elect would push for rezonings that allow for more live-work space and modern office space, but declined to elaborate further.

TAMI (technology, advertising, media, and information) tenants accounted for over a quarter of the top ten leases in the second quarter of 2013, as The Real Deal reported. [WSJ] – Hiten Samtani