In the past ten years, Google has taken massive strides in the Manhattan real estate sector, acquiring both the iconic Chelsea Market and the sprawling New York headquarters. The tech giant continued its expansion shortly after the pandemic with a historic $2.1 billion investment in the St. John’s Terminal construction project, marking the largest real estate transaction in the United States since the pandemic’s onset. This surge in real estate acquisition is not exclusive to Google alone. Amazon, Microsoft, Apple, Facebook, and Salesforce have also established their campuses on Manhattan’s West Side. This trend underscores how technology companies are rapidly overshadowing their counterparts in the banking and finance sectors, emerging as the dominant industry in the city post-pandemic.
These tech giants not only lead in employment growth but also dominate in terms of the number of companies. Twenty years ago, Tim Armstrong, now 50, became Google’s first New York-based employee. Reflecting on those early days, Armstrong remarked, “If you were hosting a cocktail party for everyone working on the internet in New York, you could have fit them all in a bar. Now, I imagine you’d have to take over Madison Square Garden and the Javits Center to accommodate everyone.” Data provided by the New York State Comptroller’s Office, as reported by Forbes, paints a vivid picture of this transformation. In 2020, the number of tech companies in the city exceeded 10,000, more than double the count from two decades prior, and nearly double the number of securities companies.
Tech employment has similarly grown, from 108,000 in 2000 to 167,000 in 2020, while the number of securities employees decreased from 190,000 to 176,000 during the same period. The tech industry’s dominance in Manhattan is evident in both overt and subtle ways. For instance, the Salesforce logo now adorns 1095 Sixth Avenue, replacing the previous MetLife sign near Bryant Park. Meanwhile, bank offices have quietly retreated. Since the aftermath of the 2008 financial crisis, the five largest U.S. banks by total assets—JPMorgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs—collectively relinquished nearly 5.5 million square feet of office space in Manhattan, according to data provided by Real Capital Analytics. During the same period, just two tech firms—Google and Amazon—acquired approximately 6.5 million square feet of office space. Additionally, Apple, Microsoft, and Facebook secured leases covering millions of square feet across the city. In the midst of the pandemic, Facebook expanded its Manhattan footprint to 2.2 million square feet by leasing 730,000 square feet at the Farley Post Office building in Midtown. Apple also signed a 220,000-square-foot lease nearby at 11 Penn Plaza. Microsoft, on the other hand, holds an additional 200,000 square feet of leased space at 11 Times Square and was recently in negotiations to secure another 100,000 square feet at an undisclosed building in the Flatiron District.
Darcy Stacom, a commercial broker who represented Google in its real estate acquisitions, commented, “The city was always considered a financial services city, and now it’s seen as a financial services and tech city. It has never been said before in my career.” With over four decades of experience in New York City real estate, Stacom believes that this recent surge could position the tech industry to surpass finance as the largest occupier of commercial real estate in New York by the end of the decade. Google asserts that it is strengthening its presence in New York because of the city’s abundant talent pool, a rationale echoed by Amazon, Facebook, and Microsoft. In 2021, in the midst of the pandemic, Google announced its intention to hire an additional 2,000 people in the city, expanding its local workforce to 14,000 individuals, with a focus on sales and marketing personnel at its new property. William Floyd, Google’s head of public policy and government affairs, affirmed, “With concerns about whether New York would bounce back, we thought this would be the perfect illustration of our corporate commitment to New York. In New York, tech is not only an industry but also a vital part of the city’s other industries.”