JLL Examines NYC Tech Market for March

JLL has released its April Tech Monthly report for New York City and reveals that activity has more than doubled in the first quarter of 2014 compared to the same period in 2013.
Bill Peters

Bill Peters, JLL NY

JLL has released its April Tech Monthly report for New York City and reveals that activity has more than doubled in the first quarter of 2014 compared to the same period in 2013 (approximately 1.2 million vs. 583,000 square feet leased).

In fact, January tech leasing set the bar high for the year, generating 663,276 square feet of total activity due to a number of large leases signed that month—three larger than 100,000 square feet. After this atypical January, leasing activity in February and March declined.

“Tech leasing was still strong when compared to historical figures,” Bill Peters, executive vice president with JLL’s New York office, told Commercial Property Executive. “Tech accounted for 12.6 percent of activity in March and 14.4 percent of all activity for the quarter, second only to financial services.”

Half of all tech deals in March were done in Midtown vs. Midtown South, which claimed 30 percent of tech deals for the month.

The report shows that throughout Manhattan, March was the biggest month for venture capital funding so far this year, as funding was up 12 percent over this time in 2013 ($716 million vs. $627 million).

According to Peters, the company receiving the most venture capital was CPXi, a digital media holding company, which received $30 million in funding. Exosome Diagnostics, a biotech company, received $27 million in series-B funding; followed by Payoneer, an e-commerce company, which received $25 million in series-C funding.

“The biotechnology sector was the strongest this month, receiving more than $67 million in funding,” he added. “Almost half of this funding, though, went to Exsome Diagnostics.”

The report shows that Manhattan tech employees average about $93,915 a year, almost 50 percent more than the average U.S. employee, but about 13 percent less than their counterparts in Silicon Valley.

Looking ahead, as the tech ecosystem evolves and more take note of New York City as a tech hub, Peters said venture capital should continue to pour in, with tech employment expanding, hiring remaining vibrant, and the economy continuing to improve.

“New York City is often dubbed as the next Silicon Valley. Its tech sector is dynamic and robust. It remains the sector to watch,” Peters concluded. “We expect a large number of tech leases to close in the coming months.”