The city that never sleeps will awaken again
Anyone visiting New York City for the first time is overwhelmed by the sheer size of the skyline and immediately feels the frenetic energy of people living their lives and business getting done. I’m a Brit, having moved to the US nearly 14 years ago. Suffice to say that the cultural adjustments were (and continue to be) so much more than I had anticipated. However, you adjust to your surroundings and I was soon absorbed into the sun, sea and surf of California. However, just as I was becoming fully acclimatised, my family and I made a further move to the East Coast where I set up Osborne Clarke’s New York office four years ago.
Having visited the Big Apple with both tourist and business hats on, but only a handful of times, I soon realized that the pace of corporate activity and the energy of the city was more than I expected. Anyone working in a large city will understand that you soon grow accustomed to this sort of energy and even embrace it, leveraging being at the center of arguably the world’s leading business capital. Our focus in Osborne Clarke’s US offices is to advise many of America’s most innovative and fastest growing companies on their international legal issues and so we see the US and the rest of the world through are unique (and slightly unusual) perspective.
Unfortunately, in March, like in many parts of the world, this energy disappeared at the speed of a New York minute as the pandemic quickly spread throughout the city. We were fortunate to have the ability to work remotely and quickly transitioned to working from home. While the business community retreated to their apartments and suburban homes, Midtown Manhattan emptied out and soon became a ghost town as lockdown measures were taken, shops and restaurants shutdown and many people left the city for more space and fresh air in the surrounding areas. After summer, some returned to the city, a few offices began opening up and those brave enough sought out socially distanced meetings.
Now, as we enter the winter months, the hustle and bustle of typical New York life is still very far away from returning. The Christmas decorations are up but only to be enjoyed by the local residents or handful of tourists and even the worldwide recognised Macy’s Thanksgiving Parade trundled through the empty streets of Manhattan. Some doubt if New York will ever be the same, but over the past months, the city has demonstrated its resiliency, how business has continued to get done and I’m confident that we’ll eventually see New York re-emerge as new version of its former self, even stronger and potentially better positioned for future growth.
New York is generally accepted as the financial centre of the world and has always attracted people and capital from all over the world. It’s emerging as one of the globe’s largest technology and venture capital ecosystems and is positioned for long term success despite the current challenges it and business communities around the world currently face. The city was built as a place of commerce and trade and it will remain a place where people come together to exchange ideas, put deals together and build up the economy as it has after many momentous crises of the past.
The city and its industries are adaptable, like the finance industry was when electronic trading became the norm and the trading floors were no longer the financial hubs of the past. We now see the technology industry becoming the dominant player in the market in terms of economic growth, headcount and office space in the real estate market. As in London, the city’s past and future now come together with financial services and technology converging to create the two largest FinTech ecosystems in the world.
As with all challenges, the pandemic also creates new opportunities for future success, which New York can accomplish by building back its economy around resilient, future-forward industries positioning it to weather future storms while being at the forefront global business trends. The city’s economy was already moving in this direction and it will likely accelerate in the current environment. For example, the FinTech industry has had some challenges, but it has also seen significant growth in areas like contactless payment systems and systems that support ecommerce which has experienced a rapid rise during the pandemic.
The rising tide of technology companies in New York has continued unabated this year and is most apparent when looking at the largest commercial real estate deals in the city in 2020. While many companies are shrinking their office footprint, Facebook and Amazon signed the largest real estate deals in New York this year while Apple and Google have equally grown their footprint to accommodate significant headcount growth in the city.
There are other reasons to be optimistic for the future if you look at the thriving start-up ecosystem in New York. Growth companies in New York receive more venture capital investment than anywhere else in the world outside of San Francisco and Silicon Valley. While funding slowed at the beginning of the crisis, the VCs with historically high levels of dry powder in their funds, quickly returned to fund new companies, double down on previous investments and support companies that pivoted to new business models that will thrive in the new environment.
Though some segments have suffered like travel, hospitality and retail industries, capital has been invested into many New York companies at the forefront of tomorrow’s economy in areas like FinTech, Digital Health, ecommerce, mobility, and business automation and communication technology. These industries, and many others where New York is leading player, are well positioned for both the current environment and to ride the economic trends as the world emerges from the pandemic over the coming months and years.
Though you can no longer sense the abounding energy of New York and its rapid velocity of business activity is not currently evident in a tangible way with commerce now largely conducted at the other end of a computer screen, New York’s business community has been flexible and resilient in finding ways to continue working together to build companies and lay a foundation for future economic growth. Being here in the market and a part of this community over the course of the year, I’ve seen this first-hand and I’m optimistic for the future. Once we emerge from this pandemic and can once again meet face-to-face and travel to connect with the rest of the world, we’ll collectively be well on our way to enthusiastically building the world’s most robust city back to its former glory.
With many thanks to Steve Wilson, Partner and Head of Osborne Clarke NYC for this insight into an incredible city as it seeks to progress through the pandemic.