The show “Mad Men” connotes a time in New York City before the advent of the internet. This was the time of televisions and telephones, but not yet text messages and emails. In this new economy, New York City is besieged like never before in a specific way, and today I want to tell you about it.
Some of my successful friends work for publicly traded companies, but there’s always a pressure on those publicly traded companies to create shareholder value. Because of this, we see various mergers and acquisitions where other funds buy up companies—to create more cash flow, the easiest thing to do is say, “Take them out of New York City!” They moved to New York during the “Mad Men” era, when entrepreneurs had to be in New York to be somebody. That’s where the stock market was, as well as the centers of most capital markets.
Nowadays, though, there are a lot of big companies on the West Coast, and indeed, you can have a big company hypothetically anywhere in the world. So because people are thinking that a lot of venture capital comes from outside of New York, they move their companies out, too.
"Nowadays, you can have a big company anywhere in the world."
Well, that’s bad for our New York City housing market! It’s creating a sale that takes people away, and that’s a big deal. However, the Internet has always created a decentralized workforce where these companies have corporate headquarters in one place and employees in another. This allows employees to choose where they want to live, and most people become curious about living in NYC at some point in their lives—there’s certainly nowhere else like it in the world.
In that way, this same decentralizing force is actually sending people to New York City. In an ironic twist, those tech companies tip the scales because in addition to the decentralized workforces coming to the city, there are also major players buying up real estate here. For example, we know that Google paid over $2 billion in cash for their office headquarters in Chelsea, and all of those players are the ones flocking to NYC.
All in all, New York has survived the internet—in fact, it’s thriving. It ultimately isn’t the “Mad Men” Age verse the Internet Age; we really are the beneficiary of the current economic technological system and I think it’ll serve us well for years to come.
If you have any other questions for me about the NYC market or about real estate in general, don't hesitate to reach out to me today. I look forward to hearing from you.