Story first appeared in WSJ.com.
After years of dominating the Manhattan rental market, Wall Street dynamos are starting to make way for bloggers and tech geeks.
Media and technology workers are rapidly gaining ground as a percentage of the borough's renters—while the numbers of finance workers in the pool shrink, according to a new report.
Developers have taken note. Wealthy young bankers in the 1980s sought a prestigious pre-war building with a Park Avenue address, and more recently, they were on the hunt for a flashy financial district bachelor pad. A new generation of renters is looking for something different.
The demographic they seemed to have in mind was mostly single men, who were living high on the hog and had money to blow. Now they recognize that it's a broader market.
Young media and tech workers flock to neighborhoods such as Williamsburg in Brooklyn and Chelsea, where many of their employers are also moving their offices. These tenants also demand high-tech amenities such as ubiquitous wireless internet access, movie screening rooms and, in one case, a Wii room.
The demographic shift is also changing how developers market those buildings.
Old media is taking second place to the Internet as a medium of advertising. Renters and buyers are almost exclusively finding rentals through the Internet.
The report used trend data from 700,000 Manhattan rental transactions processed since 2005 through On-Site.com, a provider of electronic tenant screening and lease processing services for landlords.
Until now, the report was released only to residential developers, such as Durst Fetner Residential, Douglaston Development and Stonehenge Partners Inc., which use it to strategize about the location, amenities and marketing of their new buildings.
This report provided the most recent version, which is current through mid-year 2011, to The Wall Street Journal. It shows a five-year trend toward more Manhattan renters working in technology and creative sectors, with fewer working in finance.
That held true even prior to the collapse of Lehman Brothers and Bear Stearns in 2008.
In 2005, finance workers made up just over 58% of Manhattan renters, while they now comprise 45%,. The proportion of creative workers who make up the market has nearly doubled to 17% from 8.6% in 2005.
The proportion of renters employed in the technology sector has also risen to 11.6% from 7.2%, partly because Google, Facebook and Twitter have all expanded their Manhattan offices in the last five years.
Young media and tech workers generally aren't raking in the same salaries as young bankers and can't pay as much for housing, which some believe could drive rents down in the city over the long haul.
That fear hasn't yet proved true. Rents have surged in the past six months especially. Moreover, there is an anticipation of an upward trend over the next couple of years, based on the percentage of their incomes that people are currently putting toward rent.
In early 2007, when confidence in the economy was at its peak, renters spent the highest percentage of their income on rent. As the economy hit bottom they spent 20% less of their income on rent. The number now sits at a five-year average, suggesting there is room for significant growth.
