As many NY-based startups are beginning to see rapid growth, more space becomes necessary. Perhaps the most sought-after locations for these companies are in Midtown due to its proximity to larger business partners.
As many financial tenants struggle to continue paying rents, it is predicted that the emergence of successful startups in the area will help counter the blow. Typically, new startups will seek fun, eclectic spaces to attract young talent in lower-Midtown in areas such the Meatpacking and Flatiron districts, as well as Chelsea, which currently houses Google, Inc.
However, according to Reuters, once these companies gain momentum, they begin to seek space further north, which offer larger spaces and closer distance to commuter destinations such as Grand Central Station. One such company is SocialFlow, which helps firms optimize their message on sites such as Twitter and Facebook. Recently, the company moved from its 1,800 square foot Meatpacking District office into a 10,000 square foot office on East 45th to accommodate its current 31 person staff.
Pricing is also a factor when choosing to move more north. According to Reuters, real estate services company Cushman & Wakefield says that vacancies in Midtown south fell to 5.9% from 8% last year, effectively increasing rent prices by 10.5%, the largest increase in Manhattan. With more funding comes more startups. as they command office space that ultimately raise the areas rent.
Another amenity that the Midtown spaces offer that many new startups seem to often shun, is private offices. And though growing startups need these offices for meetings on various issues, many of them also take the nontraditional aspects of their smaller offices with them when they move i.e. ping pong tables and kitchens.
Other companies that have space in Midtown include Facebook and Twitter, which are across the street from each other near Grand Central, Seamless on 42nd and 6th, and LinkedIn located in the Empire State Building.