With all the froth and flutter about New York City startups, it’s easy to forget they’re not special creatures, free from the tyrannical pressures of the real estate market. Today comes a reminder courtesy of The New York Times, which reports that many tech companies companies, rather than waste precious rocket fuel (i.e., capital), are electing to move north–to Midtown.
It’s no secret the startup scene is infatuated with the notion of creatively converted industrial spaces, the kind of drafty, wide-open offices that just scream “young and hip.” The problem is, that starving-artist aura doesn’t come cheap, and this isn’t dotcom 1.0:
At the same time, fledgling tech companies have become more cost-conscious than their predecessors, many of whom burned through their seed money in a short time, brokers say. Significant savings are possible in Midtown, where rents can be $40 a square foot compared with up to $70 a square foot in trendier areas, according to Cushman data.
Tech companies: They’re just like us! Harried by gentrification and ever-escalating rent.
Hence, Silicon Alley is creeping northward, into–God forbid–the mid-30s. It’s not like they’ve gone so far as to camp out next to the Plaza, which would really be a Rubicon, but the new addresses give off a definite whiff of Penn Station. But don’t you worry, it’s still possible to find spaces that evoke manufacturing-age New York, so your CEO can continue babbling about shipping virtual products in an appropriate setting:
Yet the look of those original industrial spaces, with open layouts, tall windows and high ceilings, can also be found in Midtown, like at 1385 Broadway, a 23-story building on West 38th Street in the garment district where many wedding dress manufacturers were once based.
Of course, despite the lack of La Colombe Torrefaction outposts, it’s not exactly like these companies are colonizing Mars: Twitter is at 360 Madison Avenue, near Grand Central; Facebook is nearby, at 335 Madison Avenue. Plus, there’s always the Blue Bottle Coffee in Rockefeller Center.