That’s Commercial Real Estate, to you. Software may be eating the world, and you can disrupt all you’d like, but one thing hasn’t changed: all of those entrepreneurs, developers and disruptors still need a place to work, and that means real estate, and that was the topic of discussion at the NYC Tech Forum held recently, to look at the industry then and now and to examine the changing needs and literally shifting landscape.
Considering that the city’s tech sector is growing at twice the rate of any of the other services in New York and make up 7% of the jobs here, it stands to reason that, when it comes to physical space, that’s another area where the tech community is taking a big bite out of the Big Apple.
“You have to innovate. You have to think forward,” said Bill Rudin, CEO and Vice Chairman of Rudin Management, who opened 55 Broad Street, the first wired building to service the then nascent New York tech industry in the Web 1.0 era. “It took 18 months to get the building fully rented. Now we’re building a wired city.”
The community has certainly expanded since those early days, with the tech sector having filtered into Midtown East and West, Flatiron (known as the heart of Silicon Alley), SoFi (South of Flatiron) and to the outer boroughs – Brooklyn in particular.
“Everyone loves Flatiron. Everyone loves Chelsea,” said Simon Wasserberger, Managing Director, L&L Holdings. “But they’re charging Park Avenue rents. They’ve gone up 19% since 2013, and there’s more demand than even Midtown South can accommodate.”
“The boroughs are finally participating in the growth, almost serving as a relief valve,” added Greg Popkin, Chief Operating Office at RFR Holding. “Communities are developing and it’s not a threat to Manhattan. It’s just part of the growth.”
“Brooklyn is the destination of choice for young people moving to New York City,” said Micah Kotch, Director of Incubator Initiatives, NYCACRE. “They live here, so they want to work here, too, and walk or bike to work.”
Makes sense. Brooklyn certain has the space for it. Not to mention that the rents are much more startup friendly.
“You have to think about not the building alone, but the urban workscape,” said Andrew Kimball, Director of Innovation Economy Initiatives, Jamestown Properties, who helped to develop the Brooklyn Navy Yard and is now turning his attention to Industry City, with a focus on converting it into a multiuse space - and a self sustaining entrepreneurial ecosystem with tech, manufacturing and even food startups all being nurtured under one proverbial roof. “You need to create a community of people and culture, art and design, fashion and manufacturing. And you need common areas, outdoor space – and food.
Industry City wants to embed academic institutions into the space as well.
“It feeds into the culture of creativity,” Kimball added.
A hyper-networked, hybrid live/work spaces was his suggestion, and the idea may well be a popular one.
“We put 50 spaces on the market in January and they were filled up in a few weeks,” he said.
Creative ways for organizations to make use of space and work together seems to be another future trajectory.
“The tech sector is a leader in getting people to work differently.”
Not to mention that individual offices are only occupied 46% of the time. The idea: that the restaurant share power with the guy working in his office.
Despite all of the changes, at the end of the day, it’s still all about infrastructure, be it connectivity, shared usage, or power grid itself.
“We can’t trust the grid,” said Kotch. “Hurricane Sandy was a test – and a wake up call. It’s great to have great technology, but if you can’t get electricity to your computer, the best tech in the world does you no good.”