Q1 2023 Economic Report
Office Leasing
66 tenants signed leases in Flatiron and NoMad this quarter totaling 413,000 SF, on par with 2019 and
rates for Class A and Class B office space increased 1 9% and 3 1%, respectively, since Q1 2022
COMMERCIAL A & B OFFICE SPACE
LEASING VOLUME
DIVERSE NEW OFFICE TENANTS
AVAILABILITY RATE
Flatiron and NoMad continue to attract a wide range of commercial office tenants ranging from finance and creative industries to newcomers like cybersecurity, life sciences, and media/radio broadcasting.
# of Leases Total SF Class A Class B Source: CoStar
22.7% 23.3% 22.8% 25.7% 24.6% 18.6% 19.7% 20.1% 20.1% 21.7% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
2020 Availability
63 67 38 71 66 431 421 393 811 413 0 100 200 300 400 500 600 700 800 900 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Thousands LARGEST Q1
LARGEST Q1 LEASES *Source: CoStar Finance & Insurance 10% Information 10% Healthcare 20% Real Estate 10% Professional, Scientific & Technical Services 50% COMPANY ADDRESS BUILDING CLASS SQUARE FEET BUSINESS SERVICE Braze 63 Madison Avenue A 92,306 Software / Advertising DoorDash 125 West 25th Street B 57,691 Food Delivery MediaCo Holding 48 West 25th Sreet B 25,000 Media / Radio Broadcast Merge API 902 Broadway B 18,200 Human Resources / Payroll Sunshine Sachs Morgan & Lylis 6 East 32nd Street B 16,000 Public Relations / Communications 777 Partners One Madison A 18,476 Finance / Investing Palo Alto Networks One Madison A 28,903 Cybersecurity Life Sciences Lab Cure (345 Park Avenue South) A 6,000 Life Sciences Lab Children’s Dyslexia Center Masonic Hall (71 West 23rd Street) B Health Center
LEASES, BY CATEGORY
Following economic uncertainty the decade prior, Flatiron and NoMad’s employer base grew 13 % with nearly 800 businesses signing leases from 2010 to 2020 The commercial office environment remained quite stable with the number of employees fluctuating, at most, 3 4% a year (and averaging + 04%/year since 2000)
Since the pandemic, Health Care, Finance & Insurance, and Information services have led sector growth. Diversification continues with Q1 leases including cybersecurity firm Palo Alto Networks and a $50 million pilot “Lab of the Future” at Deerfield Management Company’s life science lab, Cure.
83% 90%
89%
104% 98% 94%
88%
106% 111%
96% compared to 2020
*Source: QCEW, CoStar EMPLOYERS 2002 2012 2019 2022 1,426 1,190 483 421 442 172 158 170 120 1,584 912 450 423 442 273 214 230 216 1,635 698 434 508 520 387 236 301 290 1,478 579 388 530 511 364 208 318 322 Professional, Scientific & Technical Services Wholesale Retail Trade Information Real Estate Food & Hospitality Arts & Entertainment Finance & Insurance Health Care
Employers
9/11 5,500 6,000 6,500 7,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9/11
-3%
*Source: QCEW
FLATIRON NOMAD BUSINESS RESILIENCY Total Employees Largest % Decrease Largest % Growth The Great Recession +2.6% +3.1% +2.8% 2019 v 2022
COVID-19 RECOVERY -3.4%
Employers
COVID-19 Pandemic
COVID-19 RECOVERY EMPLOYMENT GROWTH
+67% -22% +49% -11% +36% +229% +552% -15% +39%
16,200 7,710 3,562 10,411 2,444 3,384 799 14,193 3,911 22,444 7,052 4,889 9,844 2,617 8,950 5,026 13,430 3,513 25,281 6,842 6,552 11,379 3,156 14,266 7,131 11,661 5,301 24,094 6,052 5,954 9,264 3,318 11,150 5,209 12,073 5,448 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Professional, Scientific & Technical Services Wholesale Retail Trade Information Real Estate Food & Hospitality Arts & Entertainment Finance & Insurance Health Care EMPLOYEES BY SECTOR 2002 2012 2019 2022
2002 v 2022 2019 v 2022 9/11 80,000 90,000 100,000 110,000 120,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 The Great Recession COVID-19 Pandemic Employees *Source: QCEW, NYCEDC, Exteros)
to 2019
91% 88% 95% 81% 105% 78% 73% 104% 103% Total Employees
89% recovery compared
FLATIRON NOMAD WORKFORCE RESILIENCY
Employees *Source: QCEW
Flatiron and NoMad have historically supported a diverse mix of ground floor retail and upper floor office industries At the end of 2022, district-wide COVID-19 employment recovery reached 89%. The Food & Hospitality and Arts & Entertainment sectors were most impacted, but both have rebounded significantly.
Economic Impact
INCREASED FOOT TRAFFIC = BUSTLING LOCAL ECONOMY
Neighborhood businesses benefitfrom increasedemployee foot traffic as the averageManhattan office employeespends $18 on daily meals,shopping, and entertainment (WFH Research). FlatironandNoMad office return rates increased 33% yearover- year in March, resulting in an estimated $5M+ in spending from the 14,000 additional office workers in thedistrict each day. Visitor foot traffic andsubway ridership ranged from 80- 90% recovery in March (Q1 2023 Mobility Report), outpacing NYC averages.
FULL-TIME EMPLOYEES
Weekday Average March Highlights % Recovery compared to 2019
LOCAL ECONOMIC NEWS OF NOTE
General Assembly, a tech-education firm at 10 East 21st Street, launched its technology apprenticeship program in February. The program, which pays apprentices to train alongside tech professionals, is aligned with Mayor Eric Adams’ Apprenticeship Accelerator which aims to connect 30,000 New Yorkers to similar programs by 2030 (NYC.gov, Crain’s).
In March, Governor Kathy Hochul announced the development of a $50M preclinical drug discovery lab at Deerfield Management’s Cure (345 Park Avenue South) Businesses anchored in New York will be incentivized to use the space, and the lab is expected to attract other life science firms to bolster the sector’s workforce in NYC (NY State).
Also in March, Councilmember Erik Bottcher joined executives at The Masonic Hall (71 West 23rd Street) for a ribbon-cutting celebrating the opening of the Children’s Dyslexia Center. The center was made possible by a $1M gift from the Trustees of the Masonic Hall and Asylum Fund.
*Source: Placer.ai, MTA, KastleSUBWAY RIDERSHIP
Daily Average Exits March Highlights % recovery from 2019 108 119 118 31 35 40 43 47 58 57 56 64 70 74 67 51 67 74 72 73 75 67 71 84 94 91 89 84 80 97 100% 34% 63% 82% 0 20 40 60 80 100 120 140 January February March January February March April May June July August September October November December January February March April May June July August September October November December January February March Q1 2019 2021 2022 Q1 2023 Thousands
(FLATION/NOMAD)
MARCH RECOVERY Flatiron & NoMad NYC 82% 70% MARCH RECOVERY Flatiron & NoMad NYC (Kastle) 66% 47% 73 81 85 68 74 37 6 9 14 17 18 19 20 17 16 16 16 18 19 19 20 20 20 26 33 32 28 29 37 42 38 40 38 34 37 46 50 50 42 48 52 56 100% 43% 22% 49% 66% 0 10 20 30 40 50 60 70 80 90 Jan-19 Feb-19 Mar-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Q1 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Thousands
NICOLE MANDEL Economic Development & Research Manager nmandel@flatironnomad.nyc 212.741.2323 x 105 FLATIRON NOMAD PARTNERSHIP 230 Fifth Avenue, Suite 1511 New York, New York 10001 P (212) 741-2323 FlatironNoMad.nyc FOLLOW US @FlatironNY Twitter, Instagram, Facebook