No need to proclaim the death knell for Midtown office, even though Midtown South and Downtown are getting all the attention. There’s a healthy pool of tenants for which only Midtown proper will do.
Trading Group Spinoffs & Boutique Hedge Funds
Proprietary trading groups spun off from the major banks to avoid Volcker Rule conflicts of interest, says Savills Studley’s Dan Posy, and these companies, some with as many as 30 employees, are looking for space. They prefer trading-ready sublease space so they can hire right away. Plus, like tech tenants, they have no projection of where their business will go and how many employees they’ll need in, say, two years. Hedge funds also are picking up talent from the larger banks. And like trading group spinoffs, they want Class-A space, Dan tells us. Demand from these two groups has created a shortage of such space.
Techies
Tech tenants priced out of Midtown South are moving into funky Midtown buildings, Dan says. Take Shutterstock's move to the Empire State Building, eMarketer's relo from Downtown to 11 Times Square, and Deutsch advertising's upcoming move from Google's 111 Eighth to 330 W 34th. These tenants like prebuilt space to help keep costs down, Dan says. On Friday, several of Dan’s colleagues (above) took advantage of Lee National Denim Day to dress like tech staffers themselves in exchange for a $5 donation: Owen Kimple, Raheel Goheer, Chris Volney, Jason Goode, Daria Gredysa, Jason Perla, Stephanie Grymes, firm president Michael Colacino, Lance Leighton, Brad Wolk, Matthew Barlow, and John Johnson. The event, for which Savills Studley has raised $150k since '05, launches Breast Cancer Awareness Month.
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