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NEW YORK CITY- Tech companies hungry for large blocks of office space are piling into Midtown, shifting away from the Flatiron District’s favored tech hub In Midtown South because of a space crunch, according to a new office study from Savills.
“Tenants want to be in high-quality space, there is still a war for large blocks of space,” Sarah Dreyer, vice president, head of Americas research at Savills, tells GlobeSt. “A lot of these tech companies are drawn to the city by tech giants like Google and Facebook.”
Midtown has the majority of large office blocks and its office availability has increased by 80 basis points over the past quarter to 11.6%, a two-year high. With the submarket providing plenty of options for tenants seeking 100,000 square feet or more, tech companies are calling.
And these tech companies are setting up shop in Midtown by the droves as Midtown South’s availability dipped 20 basis points to 7.5%, the lowest it has been since the start of 2015, according to the report. Despite market chit chatter around office leasing and co-working, New York City is deemed attractive for employers, with data still showing signs that it’s a healthy market, Dreyer said.