Tech firms face office leasing challenges
June 1, 2013

...Tech start-ups tend to have a more variable life span than other types of companies, brokers said. Many go out of business quickly. But when they become successful, they often grow incredibly quickly....

Lack of flexibility was a problem for the database company 10gen in its search for a new home, according to the firm’s brokers, Studley’s Greg Taubin and Gabe Marans.

The company had been looking to move to Midtown South or stay in Soho, where it had been subleasing space at 578 Broadway, but had trouble finding a space that would allow the shorter-than-normal lease it needed, Taubin said. The search was especially difficult in Midtown South, where tech-sector leasing has helped drive the vacancy rate to about 6 percent, the lowest in the nation, brokers said.

After a 10-month search, 10gen finally signed a five-year lease for about 29,400 square feet at 229 West 43rd Street, the revamped former Midtown headquarters of the New York Times. The landlord, private-equity giant Blackstone Group, included a lease option that allowed 10gen to expand into the remaining 30,000 feet on its floor.

“Many of the other landlords we were negotiating with throughout the process could not give us what we needed in terms of the flexibility,” said Taubin, executive managing director at Studley...