NYC’s Cryptocurrency Rush: Striking Office Gold or Not Quite Sold?

Gabe Marans, corporate managing director, Savills Studley

Cryptocurrency and blockchain. Did you just roll your eyes? Me too. These overused buzzwords continue to stubbornly infiltrate corporate boardrooms while few truly understand the promising technology. I’m a cheerleader of the burgeoning industry and own a small amount of bitcoin, but mostly to indulge my curiosity rather than a conviction that crypto is destined to replace the US dollar. But when viewed through the prism of New York City’s office market, the impact of crypto might extend well further than the success of bitcoin, litecoin or any of the other coins.

Reflecting the industry’s comparative infancy, the majority of crypto-related companies lease small spaces in co-working environments like WeWork. Although some, like the Winkelvoss’s Gemini Funds, have signed significant long-term lease obligations, it continues to be the exception rather than the rule. The continued regulatory uncertainty has fueled landlord concerns relating to credit risk, thus necessitating non-traditional leases (i.e., co-working) for all but the most established companies. As a result, to date cryptocurrency remains a minor sub-bullet in the story of NYC’s office leasing market.