Growing Companies Show Stretch Marks In New York by Lesley Hensell The office situation is getting serious in Manhattan, where a shortage of available square footage is pushing companies out of the city. In particular, high-growth industries like financial services, high-technology and biotech are fleeing the city for space that better fits their needs. Space is so tight that U.S. Sen. Charles Schumer (D - N.Y.) has created a commission, dubbed the Group of 30, to address the problem. The commission will be co-chaired by Schumer and former Treasury Secretary Bob Rubin. Panel members will include business executives, academics and labor leaders, such as Gerald Levin, chairman of Time Warner, and Arnold Levine, president of Rockefeller University. Schumer is concerned that companies like Goldman Sachs will continue looking elsewhere for office space. The investment bank recently bought land in Jersey City when it was unable to find the additional development space it needed near its lower Manhattan corporate campus. A combination of aging buildings without quality technology infrastructure, a lack of surrounding services and a dearth of space for new development has clamped down on expansion in the lower Manhattan area, which is desperately looking for ways to capitalize on the healthy economy. The panel has been charged with issuing a report in six months, including recommended initiatives for both the state and the city. One proposed solution has been public-private partnerships, with the city selling large tracts of land to developers. Both parties then would work to build infrastructure and neighborhood improvements to attract growing companies. In the lower Manhattan area, there are few restaurants, shops and amenities, and little housing. This makes the area a tough sell to high-tech companies wishing to offer a great lifestyle to prospective employees. In addition, the lack of space puts expanding companies of all stripes in a tough position. A random telephone survey of more than 150 law firms in New York City and its suburbs has found that 25 percent of those polled inhabit shared office space. Because of the shortage of all office space - including small, affordable offices in prime business areas - sharing office space is becoming increasingly popular among law firms. The survey was a project of Offices2share.com, a division of Small Biz Realty, Inc., founded by New York City-based commercial real estate broker Jeffrey Landers to address the critical need for small entrepreneurial and professional office space nationwide. Mr. Schumer is particularly concerned that a growing new media or high-technology firm headquartered in the city would have to move to accommodate expansion. He was quoted in Crain’s New York Business saying, “The sad truth is that if one of New York's new media firms grew at the same rate as American Online, it would have to leave New York because of space. Right now, New York City cannot handle an AOL, a Microsoft or a Dell. That is a frightening proposition.” In a recent survey from Cushman & Wakefield Inc., it was reported that 100 new media firms are looking for between 60,000 and 100,000 square feet of space in the Greater New York area. But about three-quarters of these firms will have to go outside the city. | 
