The city is running out of affordable office space as demand is projected to increase heavily over the next decade.
Demand for office space could reach as much as 60 million square feet, according to an NYC Economic Development Corp., study released Thursday at a Crain’s New York Business conference.
The EDC plans to work with the private sector and leverage city assets to meet that demand. Meeting the demand will require city officials to look at every possible parcel of land with an eye toward development, said Maria Torres-Springer, president of the EDC.
“This could be the largest and most rapid pace of office development New York City has seen in almost two generations,” said Torres-Springer.
Projections from the EDC far outpace 2010 projects from the city’s Independent Budget Office. In a 2010 study, they estimated an increase in demand of 52 million square feet of office space by 2040 depending on economic development and change in office usages.
The EDC’s projection suggests a really rapid growth in employment, particularly in the office-using sector, according to George Sweeting, deputy director of the city’s Independent Budget Office.
The EDC says its projections are higher than earlier estimates because those projections did not adequately account for job growth outside of Manhattan.
Emerging business districts in the outer boroughs have the capacity to meet about 40 percent of the city’s increasing demand for commercial space, according to the EDC. Manhattan neighborhoods like Hudson Yards and Midtown East can generate the rest of the needed office space.
“Fundamentally, this is about growing the capacity of our city to continue to attract, retain and grow the types of companies that provide good paying jobs to people all across the educational spectrum,” Torres-Springer said.
The EDC also sees a lot of potential for this type of growth from the biotechnology sector, which the EDC estimates will triple its need for space over the next decade. About 15 thousand people are employed by the industry citywide, but the number could be much higher.
New York City has everything the sector needs for innovation, but biotechnology companies often invent products and then leave the city for Boston, Raleigh or San Diego, Torres-Springer said.
“We struggle to retain these types of companies because of a dearth of two things: early stage capital and the type of wet lab space needed for research and product development,” Torres-Springer said. “So right now we are laser focused on addressing these obstacles.”
She plans to start with an expansion of the Alexandria Center for Life Science, a renovation of the city’s public health laboratory and financing assistance for the New York Stem Cell Foundation. The three projects would generate an estimated 750,000 square feet of needed space – a fourth of the way toward meeting projected demand.
“Biotech isn’t just about creating the next revolution of cancer care in New York City, as an industry it’s also a competitive advantage for our economy,” Torres-Springer said.
BY: Aliza Chasan