Square Feet: To Meet Demand for Chips, Samsung Bets Big on Austin

Samsung, based in South Korea, is spending billions to expand its only factory in the United States to make logic chips that analysts believe will go into many Apple iPhones and iPads. When completely finished next month, the plant will be 2.3 million square feet, one of the largest factories of any kind in North America.

Samsung, now the world’s largest maker of computer memory, has a lot riding on the plant. Analysts say the expansion will give it more space to produce chips for other semiconductor companies and help it take on contract chip companies like GlobalFoundries and Taiwan Semiconductor Manufacturing Company.

“I don’t think Samsung would ever want to be No. 2 in any market,” said Catherine Morse, the general counsel and director of public affairs at Samsung Austin Semiconductor.

After a falloff in demand for computer chips that started in 2008, the semiconductor industry roared back last year as consumers and businesses started buying more computers and mobile devices. Worldwide semiconductor sales climbed 32 percent to almost $300 billion, according to the semiconductor research firm Semico Research Corporation, and are expected to grow 2 percent this year.

As the miniaturization of circuits continues and more everyday objects incorporate computers, semiconductor companies are making chips that are found in devices as diverse as refrigerators, GPS locators and cameras.

Chip makers ramped up their global spending on land, equipment and buildings last year by 91 percent over 2009 to nearly $50 billion. This year, Semico Research predicts, semiconductor companies will invest an additional 15 percent.

The chip industry requires tremendous amounts of money. A new plant costs about $6 billion, according to the Semiconductor Industry Association, so only the largest chip makers can afford to build their own. Smaller companies team up with other companies to build a factory or have contractors make their chips.

“This is a very risky business that’s not for the faint of heart,” said Len Jelinek of the market research firm IHS iSuppli in Scottsdale, Ariz. “It’s like putting down $1 billion on the craps table. You’ve just thrown the dice and they’re in the air. You hope they land the right way and you make money.”

The semiconductor industry is an international one. Although it began in Silicon Valley, it has since gone global and many of the world’s chips are now made in Asia. Chip companies prefer to have their manufacturing scattered across the globe to be closer to customers and engineers — and to reduce risk in case of a cataclysmic event, like the recent earthquake in Japan. New and expanded plants are under construction in China, Germany, Japan, South Korea, Taiwan and the United States.

Samsung chose to expand in Austin, said Burton Nicoson, vice president of manufacturing at Samsung Austin Semiconductor, because of “the infrastructure and support system here — you can’t get that from anywhere else.”

Other draws were the city’s legacy of semiconductor?manufacturing and the University of Texas, which produces large numbers of skilled engineers, Mr. Nicoson said.

“Austin has a youth about it,” he said. “It really helps us with recruiting.”

While smartphones and tablets are largely driving the semiconductor industry’s growth spurt, demand for chips for personal computers and data centers, where information is stored on thousands of servers run by companies like Google and Microsoft, remains strong. Last year 350.9 million computers were shipped, versus 289.7 million tablets and mobile phones, according to the technology research firm Gartner.

“Semiconductors are the critical components for the whole infrastructure that gets data to you quickly,” said Bob Johnson, research vice president in Gartner’s semiconductor group in San Jose.

Intel, the world’s biggest chip maker, is spending up to $13 billion to build two new factories and upgrade four others in Oregon and Arizona over the next few years. Construction began in the fourth quarter of last year and is expected to be complete in 2013.

About every two years Intel upgrades its manufacturing processes to make chips that are smaller, cheaper, more powerful and use less power. The chip giant is upgrading four plants to produce 22-nanometer chips and is building two new factories, one in Arizona and one in Oregon, devoted to 14-nanometer chips. “When you make an investment in a factory, you’re essentially placing a bet on a manufacturing process that’s not yet done, for products that are not yet designed, to sell into a market that is not yet there,” said Chuck Mulloy, a spokesman for Intel’s technology and manufacturing group.

GlobalFoundries, a contract maker of semiconductor chips, is doubling the amount of money it spends this year to $5.4 billion, from $2.7 billion, as it expands two factories in Germany and Singapore and builds a new one near Albany.

GlobalFoundries, of Milpitas, Calif., is a private joint venture between an investment company of the government of Abu Dhabi and the chip maker Advanced Micro Devices. It expects to spend more money than it makes this year as it tries to become the biggest foundry, or contract chip maker, in the world. Sales are estimated at $4 billion in 2011.

Near Albany, in Malta, N.Y., GlobalFoundries is investing $4.6 billion in a factory that will produce 28-nanometer chips for a wide variety of customers. The 1.5 million-square-foot plant will be at full production in 2013.

“The appetite for tablet computers is a huge part of this move,” said Travis Bullard, a GlobalFoundries spokesman. “We’re adding more and more capacity to meet that demand.”

 

Confucius Statue Vanishes Near Tiananmen Square

Apparently, someone extremely powerful has taken the saying to heart, having decided that a 31-foot bronze statue of the ancient Chinese sage that was unveiled near Tiananmen Square four months ago did not belong on the nation’s most hallowed slice of real estate.

The sudden disappearance of Confucius, which took place under cover of darkness early Thursday morning, has stoked outrage among the philosopher’s descendants, glee among devoted Maoists and much conjecture among analysts who seek to decipher the intricacies of the Chinese leadership’s decisions.

Although there were some reports that the statue had been moved to a less prominent location within the newly expanded National Museum, those who had a hand in bringing Confucius to the ceremonial heart of the capital were of little help Friday. Tian Shanting, a spokesman for the museum, which had unveiled the statue with great fanfare, said he had no idea what had happened. The sculptor, Wu Weishan, declined to comment, as did city officials who have jurisdiction over Tiananmen Square.

A guard standing in front of the empty void that once held the 17-ton likeness of Confucius, his arms folded beneath flowing robes, said he thought it had been moved inside. “All I can tell you is that I came to work in the morning and it was gone,” he said, adding that there were no more museum tickets available for Friday.

The statue’s arrival in January at the museum entrance, cater-corner from the iconic portrait of Mao Zedong, set off a maelstrom of speculation, with many scholars describing it as a seismic step in the Communist Party’s rehabilitation of Confucianism.

In his day, Mao condemned that system of philosophical thought as backward and feudal; during the decade of the Cultural Revolution, Red Guards were encouraged to deface Confucian temples and statues. The scholar’s ancestral home was destroyed, and bodies of long-dead descendants were exhumed and publicly displayed.

But that was then. Eager to fill the vacuum left by the fading of Maoist ideology, the party in recent years has been championing Confucianism as a national code of conduct, with special emphasis on tenets like ethical behavior, respect for the elderly, social harmony and obedience to authority. Since 2004, the government has opened more than 300 Confucius Institutes around the world to promote the country’s “soft power.” Last year, one of the most breathlessly hyped state-backed films was “Confucius,” a biopic about the philosopher that starred Chow Yun-Fat, perhaps best known in the West for his role in “Crouching Tiger, Hidden Dragon.” (The film, timed to the Communist Party’s 60th anniversary in power, was a box-office and critical dud.)

Some academics say that placing a mammoth paean to Confucius a stone’s throw from Mao’s mausoleum may have gone too far. Chen Lai, a Confucian studies expert at Tsinghua University, suggested that those in the influential Central Party School who opposed the statue’s placement near the square had been quietly agitating against it.

Kong Weidong, vice secretary of the International Confucius Descendants Reunion Association, who says he is a 75th-generation descendant of the sage, blamed powerful “leftists” for orchestrating the statue’s removal. “If they had a process for putting the statue there, they should have gone through the proper channels to take it away,” he said.

Unrepentant Maoists celebrated the move on Friday. “The witch doctor who has been poisoning people for thousands of years with his slave-master spiritual narcotic has finally been kicked out of Tiananmen Square!” one writer, using the name Jiangxi Li Jianjun, wrote on the Web site Maoflag.net.

For those who have been heartened by the government’s embrace of Confucian values, news of the statue’s removal was devastating. Guo Qijia, a professor at Beijing Normal University who helps run the China Confucius Institute, said that only Confucian teachings could rescue China from what he described as a moral crisis.

“Students come home from school and tell their parents, ‘One of my classmates got run over by a car today — now I have one less person to compete against,’?” he said. “We have lost our humanity, our kindness and our spirit. Confucianism is our only hope for becoming a great nation.”

Ian Johnson and Yang Xiyun contributed reporting, and Mia Li contributed research.

 

Confucius Statue Vanishes Near Tiananmen Square

Apparently, someone extremely powerful has taken the saying to heart, having decided that a 31-foot bronze statue of the ancient Chinese sage that was unveiled near Tiananmen Square four months ago did not belong on the nation’s most hallowed slice of real estate.

The sudden disappearance of Confucius, which took place under cover of darkness early Thursday morning, has stoked outrage among the philosopher’s descendants, glee among devoted Maoists and much conjecture among analysts who seek to decipher the intricacies of the Chinese leadership’s decisions.

Although there were some reports that the statue had been moved to a less prominent location within the newly expanded National Museum, those who had a hand in bringing Confucius to the ceremonial heart of the capital were of little help Friday. Tian Shanting, a spokesman for the museum, which had unveiled the statue with great fanfare, said he had no idea what had happened. The sculptor, Wu Weishan, declined to comment, as did city officials who have jurisdiction over Tiananmen Square.

A guard standing in front of the empty void that once held the 17-ton likeness of Confucius, his arms folded beneath flowing robes, said he thought it had been moved inside. “All I can tell you is that I came to work in the morning and it was gone,” he said, adding that there were no more museum tickets available for Friday.

The statue’s arrival in January at the museum entrance, cater-corner from the iconic portrait of Mao Zedong, set off a maelstrom of speculation, with many scholars describing it as a seismic step in the Communist Party’s rehabilitation of Confucianism.

In his day, Mao condemned that system of philosophical thought as backward and feudal; during the decade of the Cultural Revolution, Red Guards were encouraged to deface Confucian temples and statues. The scholar’s ancestral home was destroyed, and bodies of long-dead descendants were exhumed and publicly displayed.

But that was then. Eager to fill the vacuum left by the fading of Maoist ideology, the party in recent years has been championing Confucianism as a national code of conduct, with special emphasis on tenets like ethical behavior, respect for the elderly, social harmony and obedience to authority. Since 2004, the government has opened more than 300 Confucius Institutes around the world to promote the country’s “soft power.” Last year, one of the most breathlessly hyped state-backed films was “Confucius,” a biopic about the philosopher that starred Chow Yun-Fat, perhaps best known in the West for his role in “Crouching Tiger, Hidden Dragon.” (The film, timed to the Communist Party’s 60th anniversary in power, was a box-office and critical dud.)

Some academics say that placing a mammoth paean to Confucius a stone’s throw from Mao’s mausoleum may have gone too far. Chen Lai, a Confucian studies expert at Tsinghua University, suggested that those in the influential Central Party School who opposed the statue’s placement near the square had been quietly agitating against it.

Kong Weidong, vice secretary of the International Confucius Descendants Reunion Association, who says he is a 75th-generation descendant of the sage, blamed powerful “leftists” for orchestrating the statue’s removal. “If they had a process for putting the statue there, they should have gone through the proper channels to take it away,” he said.

Unrepentant Maoists celebrated the move on Friday. “The witch doctor who has been poisoning people for thousands of years with his slave-master spiritual narcotic has finally been kicked out of Tiananmen Square!” one writer, using the name Jiangxi Li Jianjun, wrote on the Web site Maoflag.net.

For those who have been heartened by the government’s embrace of Confucian values, news of the statue’s removal was devastating. Guo Qijia, a professor at Beijing Normal University who helps run the China Confucius Institute, said that only Confucian teachings could rescue China from what he described as a moral crisis.

“Students come home from school and tell their parents, ‘One of my classmates got run over by a car today — now I have one less person to compete against,’?” he said. “We have lost our humanity, our kindness and our spirit. Confucianism is our only hope for becoming a great nation.”

Ian Johnson and Yang Xiyun contributed reporting, and Mia Li contributed research.

 

Square Feet: Manhattan’s Tech Start-Ups Settle in the Flatiron District and Chelsea

“When people talk about Silicon Alley, it’s always been just a concept,” said Michael Kirven, the principal of Bluewolf Inc., a technical consulting company that has moved three times within the Flatiron district in the last decade. “Within five years, you’re going to have a true Silicon Alley. Every company that’s a tech start-up will be here.”

The older, small office buildings in the Flatiron district have attracted start-ups, while large companies like Google and IAC/InterActiveCorp have found homes in Chelsea.

It is no accident, for example, that General Assembly, a new educational institute, meeting place and co-working environment devoted to technology entrepreneurs, was established at 902 Broadway, at East 20th Street, in the middle of the Flatiron district.

“There were a lot of young companies, a lot of designers and artists, and a lot of venture capitalists working in that neighborhood,” said Adam Pritzker, a co-founder of General Assembly. “There were a lot of these pieces that we wanted to put together.”

Craig Nevill-Manning, the engineering director at Google who is largely responsible for the company’s New York presence, said, “New York has not traditionally been known as a center of technological innovation, but it is true now.” He added, “There’s a pretty exciting start-up scene now that there wasn’t in 2003, when I arrived.”

Much of what attracts those start-ups is the loftlike space that the Flatiron district offers, in relatively small footprints. Adams & Company, a property management and leasing company that has almost two million square feet in the Flatiron district under management, oversees spaces as small as 1,500 square feet.

“You have a lot of buildings with high ceilings and natural light, overlooking Madison Square Park,” said James Buslik, principal of Adams & Company, who leased space recently to several tech companies, including Mashable, Demand Media, Tremor Media and Bluewolf. “Creative people find creative space.”

After an exhaustive search through much of Manhattan, David Mojica, the facilities director of Demand Media, said he was drawn to the exposed ventilation system and ceilings at 121 East 24th Street.

“It definitely has that upbeat technology vibe when you walk in,” Mr. Mojica said. “As soon as we saw it, we fell in love with it.”

Bluewolf has been in the neighborhood a bit longer, nearly a decade. The company recently signed a 12-year lease for 12,000 square feet at 11 East 26th Street, the same building that houses Yelp, the online city guide based in San Francisco. Bluewolf chose the building for its central location, the character of the space and its proximity to many of the company’s customers, Mr. Kirven of Bluewolf said. The private roof deck did not hurt, either.

“You get the amenities of a Midtown building but the flexibility of a loft in Brooklyn,” Mr. Kirven said. “Obviously without the Midtown rents, either.”

Prices are substantially lower than in Midtown and other prime office neighborhoods. Along Fifth, Madison and Park Avenues, rents can range from $50 to $75 per square foot, said Grant Greenspan, a principal of the Kaufman Organization. On the side streets, prices can fall to $26 or $27.

The Kaufman Organization has been getting more involved with the Flatiron district. In December the company bought 100-104 Fifth Avenue, a building with 275,000 square feet of space. Apple snapped up a short-term lease of 10,000 square feet on the sixth floor for its mobile advertising network, iAd.

The Kaufman Organization has also helped Paperless Post, Break Media and Zemoga find space in the neighborhood.

“You’ve got everyone from someone who’s selling a phone app to online retail,” Mr. Greenspan said. “Anything in terms of taking advantage of the Internet.”

Another appealing characteristic of the Flatiron district is that the landlords seem to be flexible about the lengths of leases. A short lease is a major advantage for start-ups, because they often grow at an exponential rate, or disappear, in the blink of an eye.

Bonobos, an online men’s apparel store, is only three and a half years old and has already outgrown two offices (three if the apartment of the founder and chief executive, Andy Dunn, is included). After looking at 70 possibilities throughout downtown Manhattan, the company signed a three-year lease at 45 West 25th Street, about 10,000 square feet of space.

“A lot of landlords are looking at 10-year leases,” Mr. Dunn said. “As a start-up, there’s no way to do that. Even a three-year lease was a scary thought.”

One more perk of the Flatiron district is its proximity to venture capital, which provides the rocket fuel for start-ups. A number of venture capital businesses, including Union Square Ventures, First Round Capital and IA Ventures, have offices nearby.

If start-ups look to Flatiron for its small spaces, larger tech companies are choosing Chelsea for its sprawling floors. IAC, for example, opened its Frank Gehry-designed world headquarters at 555 West 18th Street in 2007. And Google moved to the hulking 111 Eighth Avenue in 2006 partly so all employees could be on the same floor, which was 200,000 square feet — or about five acres. In December, the company bought the entire building, 2.9 million square feet.

“There’s a psychological barrier to going to a different floor to talk to somebody,” Mr. Nevill-Manning said. “Having 800 people on a single floor means we’re much more productive and much more creative as a result.”

Google also has leased space in nearby Chelsea Market, which spans 9th and 10th Avenues between 15th and 16th Streets. Of that building’s 1.2 million square feet of commercial space, 780,000 square feet is leased to technology and media companies like Scripps Networks (which owns the Food Network) and Yext, an Internet marketing company, said Michael Phillips, a managing director of Jamestown Properties, which owns the building.

“I don’t think Midtown has inventory that’s interesting the way this is interesting,” Mr. Phillips said. “And I think the public amenities are almost incomparable,” he added, referring to Hudson River Park, the High Line, Chelsea Piers and the concourse of Chelsea Market.

Many companies have chosen Silicon Alley to be close to similar companies, which might be their clients, their suppliers, their competitors or a source of new hires. Mr. Dunn of Bonobos, for example, hired his vice president of merchandising from J. Crew, which is at 770 Broadway at East Ninth Street, and his vice president of marketing from the Gilt Groupe, at 2 Park Avenue, between 32nd and 33rd Streets, both nearby.

For Google, on the other hand, the proximity has not been that important.

“From a recruiting point of view, a lot of those connections get made virtually,” Mr. Nevill-Manning said. “They know where to find us online.”

 

Square Feet: Manhattan’s Tech Start-Ups Settle in the Flatiron District and Chelsea

“When people talk about Silicon Alley, it’s always been just a concept,” said Michael Kirven, the principal of Bluewolf Inc., a technical consulting company that has moved three times within the Flatiron district in the last decade. “Within five years, you’re going to have a true Silicon Alley. Every company that’s a tech start-up will be here.”

The older, small office buildings in the Flatiron district have attracted start-ups, while large companies like Google and IAC/InterActiveCorp have found homes in Chelsea.

It is no accident, for example, that General Assembly, a new educational institute, meeting place and co-working environment devoted to technology entrepreneurs, was established at 902 Broadway, at East 20th Street, in the middle of the Flatiron district.

“There were a lot of young companies, a lot of designers and artists, and a lot of venture capitalists working in that neighborhood,” said Adam Pritzker, a co-founder of General Assembly. “There were a lot of these pieces that we wanted to put together.”

Craig Nevill-Manning, the engineering director at Google who is largely responsible for the company’s New York presence, said, “New York has not traditionally been known as a center of technological innovation, but it is true now.” He added, “There’s a pretty exciting start-up scene now that there wasn’t in 2003, when I arrived.”

Much of what attracts those start-ups is the loftlike space that the Flatiron district offers, in relatively small footprints. Adams & Company, a property management and leasing company that has almost two million square feet in the Flatiron district under management, oversees spaces as small as 1,500 square feet.

“You have a lot of buildings with high ceilings and natural light, overlooking Madison Square Park,” said James Buslik, principal of Adams & Company, who leased space recently to several tech companies, including Mashable, Demand Media, Tremor Media and Bluewolf. “Creative people find creative space.”

After an exhaustive search through much of Manhattan, David Mojica, the facilities director of Demand Media, said he was drawn to the exposed ventilation system and ceilings at 121 East 24th Street.

“It definitely has that upbeat technology vibe when you walk in,” Mr. Mojica said. “As soon as we saw it, we fell in love with it.”

Bluewolf has been in the neighborhood a bit longer, nearly a decade. The company recently signed a 12-year lease for 12,000 square feet at 11 East 26th Street, the same building that houses Yelp, the online city guide based in San Francisco. Bluewolf chose the building for its central location, the character of the space and its proximity to many of the company’s customers, Mr. Kirven of Bluewolf said. The private roof deck did not hurt, either.

“You get the amenities of a Midtown building but the flexibility of a loft in Brooklyn,” Mr. Kirven said. “Obviously without the Midtown rents, either.”

Prices are substantially lower than in Midtown and other prime office neighborhoods. Along Fifth, Madison and Park Avenues, rents can range from $50 to $75 per square foot, said Grant Greenspan, a principal of the Kaufman Organization. On the side streets, prices can fall to $26 or $27.

The Kaufman Organization has been getting more involved with the Flatiron district. In December the company bought 100-104 Fifth Avenue, a building with 275,000 square feet of space. Apple snapped up a short-term lease of 10,000 square feet on the sixth floor for its mobile advertising network, iAd.

The Kaufman Organization has also helped Paperless Post, Break Media and Zemoga find space in the neighborhood.

“You’ve got everyone from someone who’s selling a phone app to online retail,” Mr. Greenspan said. “Anything in terms of taking advantage of the Internet.”

Another appealing characteristic of the Flatiron district is that the landlords seem to be flexible about the lengths of leases. A short lease is a major advantage for start-ups, because they often grow at an exponential rate, or disappear, in the blink of an eye.

Bonobos, an online men’s apparel store, is only three and a half years old and has already outgrown two offices (three if the apartment of the founder and chief executive, Andy Dunn, is included). After looking at 70 possibilities throughout downtown Manhattan, the company signed a three-year lease at 45 West 25th Street, about 10,000 square feet of space.

“A lot of landlords are looking at 10-year leases,” Mr. Dunn said. “As a start-up, there’s no way to do that. Even a three-year lease was a scary thought.”

One more perk of the Flatiron district is its proximity to venture capital, which provides the rocket fuel for start-ups. A number of venture capital businesses, including Union Square Ventures, First Round Capital and IA Ventures, have offices nearby.

If start-ups look to Flatiron for its small spaces, larger tech companies are choosing Chelsea for its sprawling floors. IAC, for example, opened its Frank Gehry-designed world headquarters at 555 West 18th Street in 2007. And Google moved to the hulking 111 Eighth Avenue in 2006 partly so all employees could be on the same floor, which was 200,000 square feet — or about five acres. In December, the company bought the entire building, 2.9 million square feet.

“There’s a psychological barrier to going to a different floor to talk to somebody,” Mr. Nevill-Manning said. “Having 800 people on a single floor means we’re much more productive and much more creative as a result.”

Google also has leased space in nearby Chelsea Market, which spans 9th and 10th Avenues between 15th and 16th Streets. Of that building’s 1.2 million square feet of commercial space, 780,000 square feet is leased to technology and media companies like Scripps Networks (which owns the Food Network) and Yext, an Internet marketing company, said Michael Phillips, a managing director of Jamestown Properties, which owns the building.

“I don’t think Midtown has inventory that’s interesting the way this is interesting,” Mr. Phillips said. “And I think the public amenities are almost incomparable,” he added, referring to Hudson River Park, the High Line, Chelsea Piers and the concourse of Chelsea Market.

Many companies have chosen Silicon Alley to be close to similar companies, which might be their clients, their suppliers, their competitors or a source of new hires. Mr. Dunn of Bonobos, for example, hired his vice president of merchandising from J. Crew, which is at 770 Broadway at East Ninth Street, and his vice president of marketing from the Gilt Groupe, at 2 Park Avenue, between 32nd and 33rd Streets, both nearby.

For Google, on the other hand, the proximity has not been that important.

“From a recruiting point of view, a lot of those connections get made virtually,” Mr. Nevill-Manning said. “They know where to find us online.”

 

Square Feet: Manhattan’s Tech Start-Ups Settle in the Flatiron District and Chelsea

 

“When people talk about Silicon Alley, it’s always been just a concept,” said Michael Kirven, the principal of Bluewolf Inc., a technical consulting company that has moved three times within the Flatiron district in the last decade. “Within five years, you’re going to have a true Silicon Alley. Every company that’s a tech start-up will be here.”

The older, small office buildings in the Flatiron district have attracted start-ups, while large companies like Google and IAC/InterActiveCorp have found homes in Chelsea.

It is no accident, for example, that General Assembly, a new educational institute, meeting place and co-working environment devoted to technology entrepreneurs, was established at 902 Broadway, at East 20th Street, in the middle of the Flatiron district.

“There were a lot of young companies, a lot of designers and artists, and a lot of venture capitalists working in that neighborhood,” said Adam Pritzker, a co-founder of General Assembly. “There were a lot of these pieces that we wanted to put together.”

Craig Nevill-Manning, the engineering director at Google who is largely responsible for the company’s New York presence, said, “New York has not traditionally been known as a center of technological innovation, but it is true now.” He added, “There’s a pretty exciting start-up scene now that there wasn’t in 2003, when I arrived.”

Much of what attracts those start-ups is the loftlike space that the Flatiron district offers, in relatively small footprints. Adams & Company, a property management and leasing company that has almost two million square feet in the Flatiron district under management, oversees spaces as small as 1,500 square feet.

“You have a lot of buildings with high ceilings and natural light, overlooking Madison Square Park,” said James Buslik, principal of Adams & Company, who leased space recently to several tech companies, including Mashable, Demand Media, Tremor Media and Bluewolf. “Creative people find creative space.”

After an exhaustive search through much of Manhattan, David Mojica, the facilities director of Demand Media, said he was drawn to the exposed ventilation system and ceilings at 121 East 24th Street.

“It definitely has that upbeat technology vibe when you walk in,” Mr. Mojica said. “As soon as we saw it, we fell in love with it.”

Bluewolf has been in the neighborhood a bit longer, nearly a decade. The company recently signed a 12-year lease for 12,000 square feet at 11 East 26th Street, the same building that houses Yelp, the online city guide based in San Francisco. Bluewolf chose the building for its central location, the character of the space and its proximity to many of the company’s customers, Mr. Kirven of Bluewolf said. The private roof deck did not hurt, either.

“You get the amenities of a Midtown building but the flexibility of a loft in Brooklyn,” Mr. Kirven said. “Obviously without the Midtown rents, either.”

Prices are substantially lower than in Midtown and other prime office neighborhoods. Along Fifth, Madison and Park Avenues, rents can range from $50 to $75 per square foot, said Grant Greenspan, a principal of the Kaufman Organization. On the side streets, prices can fall to $26 or $27.

The Kaufman Organization has been getting more involved with the Flatiron district. In December the company bought 100-104 Fifth Avenue, a building with 275,000 square feet of space. Apple snapped up a short-term lease of 10,000 square feet on the sixth floor for its mobile advertising network, iAd.

The Kaufman Organization has also helped Paperless Post, Break Media and Zemoga find space in the neighborhood.

“You’ve got everyone from someone who’s selling a phone app to online retail,” Mr. Greenspan said. “Anything in terms of taking advantage of the Internet.”

Another appealing characteristic of the Flatiron district is that the landlords seem to be flexible about the lengths of leases. A short lease is a major advantage for start-ups, because they often grow at an exponential rate, or disappear, in the blink of an eye.

Bonobos, an online men’s apparel store, is only three and a half years old and has already outgrown two offices (three if the apartment of the founder and chief executive, Andy Dunn, is included). After looking at 70 possibilities throughout downtown Manhattan, the company signed a three-year lease at 45 West 25th Street, about 10,000 square feet of space.

“A lot of landlords are looking at 10-year leases,” Mr. Dunn said. “As a start-up, there’s no way to do that. Even a three-year lease was a scary thought.”

One more perk of the Flatiron district is its proximity to venture capital, which provides the rocket fuel for start-ups. A number of venture capital businesses, including Union Square Ventures, First Round Capital and IA Ventures, have offices nearby.

If start-ups look to Flatiron for its small spaces, larger tech companies are choosing Chelsea for its sprawling floors. IAC, for example, opened its Frank Gehry-designed world headquarters at 555 West 18th Street in 2007. And Google moved to the hulking 111 Eighth Avenue in 2006 partly so all employees could be on the same floor, which was 200,000 square feet — or about five acres. In December, the company bought the entire building, 2.9 million square feet.

“There’s a psychological barrier to going to a different floor to talk to somebody,” Mr. Nevill-Manning said. “Having 800 people on a single floor means we’re much more productive and much more creative as a result.”

Google also has leased space in nearby Chelsea Market, which spans 9th and 10th Avenues between 15th and 16th Streets. Of that building’s 1.2 million square feet of commercial space, 780,000 square feet is leased to technology and media companies like Scripps Networks (which owns the Food Network) and Yext, an Internet marketing company, said Michael Phillips, a managing director of Jamestown Properties, which owns the building.

“I don’t think Midtown has inventory that’s interesting the way this is interesting,” Mr. Phillips said. “And I think the public amenities are almost incomparable,” he added, referring to Hudson River Park, the High Line, Chelsea Piers and the concourse of Chelsea Market.

Many companies have chosen Silicon Alley to be close to similar companies, which might be their clients, their suppliers, their competitors or a source of new hires. Mr. Dunn of Bonobos, for example, hired his vice president of merchandising from J. Crew, which is at 770 Broadway at East Ninth Street, and his vice president of marketing from the Gilt Groupe, at 2 Park Avenue, between 32nd and 33rd Streets, both nearby.

For Google, on the other hand, the proximity has not been that important.

“From a recruiting point of view, a lot of those connections get made virtually,” Mr. Nevill-Manning said. “They know where to find us online.”

 

Square Feet: Manhattan’s Tech Start-Ups Settle in the Flatiron District and Chelsea

 

“When people talk about Silicon Alley, it’s always been just a concept,” said Michael Kirven, the principal of Bluewolf Inc., a technical consulting company that has moved three times within the Flatiron district in the last decade. “Within five years, you’re going to have a true Silicon Alley. Every company that’s a tech start-up will be here.”

The older, small office buildings in the Flatiron district have attracted start-ups, while large companies like Google and IAC/InterActiveCorp have found homes in Chelsea.

It is no accident, for example, that General Assembly, a new educational institute, meeting place and co-working environment devoted to technology entrepreneurs, was established at 902 Broadway, at East 20th Street, in the middle of the Flatiron district.

“There were a lot of young companies, a lot of designers and artists, and a lot of venture capitalists working in that neighborhood,” said Adam Pritzker, a co-founder of General Assembly. “There were a lot of these pieces that we wanted to put together.”

Craig Nevill-Manning, the engineering director at Google who is largely responsible for the company’s New York presence, said, “New York has not traditionally been known as a center of technological innovation, but it is true now.” He added, “There’s a pretty exciting start-up scene now that there wasn’t in 2003, when I arrived.”

Much of what attracts those start-ups is the loftlike space that the Flatiron district offers, in relatively small footprints. Adams & Company, a property management and leasing company that has almost two million square feet in the Flatiron district under management, oversees spaces as small as 1,500 square feet.

“You have a lot of buildings with high ceilings and natural light, overlooking Madison Square Park,” said James Buslik, principal of Adams & Company, who leased space recently to several tech companies, including Mashable, Demand Media, Tremor Media and Bluewolf. “Creative people find creative space.”

After an exhaustive search through much of Manhattan, David Mojica, the facilities director of Demand Media, said he was drawn to the exposed ventilation system and ceilings at 121 East 24th Street.

“It definitely has that upbeat technology vibe when you walk in,” Mr. Mojica said. “As soon as we saw it, we fell in love with it.”

Bluewolf has been in the neighborhood a bit longer, nearly a decade. The company recently signed a 12-year lease for 12,000 square feet at 11 East 26th Street, the same building that houses Yelp, the online city guide based in San Francisco. Bluewolf chose the building for its central location, the character of the space and its proximity to many of the company’s customers, Mr. Kirven of Bluewolf said. The private roof deck did not hurt, either.

“You get the amenities of a Midtown building but the flexibility of a loft in Brooklyn,” Mr. Kirven said. “Obviously without the Midtown rents, either.”

Prices are substantially lower than in Midtown and other prime office neighborhoods. Along Fifth, Madison and Park Avenues, rents can range from $50 to $75 per square foot, said Grant Greenspan, a principal of the Kaufman Organization. On the side streets, prices can fall to $26 or $27.

The Kaufman Organization has been getting more involved with the Flatiron district. In December the company bought 100-104 Fifth Avenue, a building with 275,000 square feet of space. Apple snapped up a short-term lease of 10,000 square feet on the sixth floor for its mobile advertising network, iAd.

The Kaufman Organization has also helped Paperless Post, Break Media and Zemoga find space in the neighborhood.

“You’ve got everyone from someone who’s selling a phone app to online retail,” Mr. Greenspan said. “Anything in terms of taking advantage of the Internet.”

Another appealing characteristic of the Flatiron district is that the landlords seem to be flexible about the lengths of leases. A short lease is a major advantage for start-ups, because they often grow at an exponential rate, or disappear, in the blink of an eye.

Bonobos, an online men’s apparel store, is only three and a half years old and has already outgrown two offices (three if the apartment of the founder and chief executive, Andy Dunn, is included). After looking at 70 possibilities throughout downtown Manhattan, the company signed a three-year lease at 45 West 25th Street, about 10,000 square feet of space.

“A lot of landlords are looking at 10-year leases,” Mr. Dunn said. “As a start-up, there’s no way to do that. Even a three-year lease was a scary thought.”

One more perk of the Flatiron district is its proximity to venture capital, which provides the rocket fuel for start-ups. A number of venture capital businesses, including Union Square Ventures, First Round Capital and IA Ventures, have offices nearby.

If start-ups look to Flatiron for its small spaces, larger tech companies are choosing Chelsea for its sprawling floors. IAC, for example, opened its Frank Gehry-designed world headquarters at 555 West 18th Street in 2007. And Google moved to the hulking 111 Eighth Avenue in 2006 partly so all employees could be on the same floor, which was 200,000 square feet — or about five acres. In December, the company bought the entire building, 2.9 million square feet.

“There’s a psychological barrier to going to a different floor to talk to somebody,” Mr. Nevill-Manning said. “Having 800 people on a single floor means we’re much more productive and much more creative as a result.”

Google also has leased space in nearby Chelsea Market, which spans 9th and 10th Avenues between 15th and 16th Streets. Of that building’s 1.2 million square feet of commercial space, 780,000 square feet is leased to technology and media companies like Scripps Networks (which owns the Food Network) and Yext, an Internet marketing company, said Michael Phillips, a managing director of Jamestown Properties, which owns the building.

“I don’t think Midtown has inventory that’s interesting the way this is interesting,” Mr. Phillips said. “And I think the public amenities are almost incomparable,” he added, referring to Hudson River Park, the High Line, Chelsea Piers and the concourse of Chelsea Market.

Many companies have chosen Silicon Alley to be close to similar companies, which might be their clients, their suppliers, their competitors or a source of new hires. Mr. Dunn of Bonobos, for example, hired his vice president of merchandising from J. Crew, which is at 770 Broadway at East Ninth Street, and his vice president of marketing from the Gilt Groupe, at 2 Park Avenue, between 32nd and 33rd Streets, both nearby.

For Google, on the other hand, the proximity has not been that important.

“From a recruiting point of view, a lot of those connections get made virtually,” Mr. Nevill-Manning said. “They know where to find us online.”