Bigger Industry, Bigger Offices

As digital marketing continues to make fortunes and siphon ad dollars from traditional media, New York firms with a stake in the channel are rapidly bulking up and outgrowing their digs. The ranks of digital ad firms in the area that have flocked to larger Big Apple offices in recent weeks include the likes of Heavy.com, Deep Focus, AKQA and Google, among many others.

The latest company to move on up is multi-channel database marketer Epsilon, which just settled in to a 50,000 square foot space in the flatiron district. Epsilon said the expansion was driven by growth in its digital business, including the launch of a new search marketing practice. The new office includes a training center to support client knowledge of digital marketing.

New York digital native Deep Focus meanwhile recently flew its long-term coop in Brooklyn’s DUMBO neighborhood for larger digs in the SoHo/Greenwich Village area. The expansion came less than three years after the company traded up for a bigger office in its original building.

Despite losing some of the art cred that came with running an agency in one of New York’s most creative neighborhoods, CEO Ian Schafer said the new neighborhood has its perks.

“There is a significant amount of creativity in this area as well, as home to numerous agencies, creative and media, as well as media companies,” he said. InDemand is in the agency’s new building, and Viacom will soon relocate its Comedy Central division there.

Another hot creative agency, AKQA, has followed a similar trajectory to that of Deep Focus, growing from zero New York employees two years ago to 55 today. One month ago it moved from a 4,000 square foot office on Spring Street into a temporary space in a building on Varick, where the firm must wait for renovations to be completed on a new 12,000 square foot space in the same building.

The biggest of digital ad firms, Google, has also apparently signed new lease agreements to expand its footprint in Manhattan’s Chelsea neighborhood. In addition to a recent 49,000 square foot add-on to its New York base of operations on Ninth Avenue, the company also plans to take over 100,000 square feet at Chelsea Market up the road, according to a report in The Observer. The reported expansions come less than a year after Google first moved to the neighborhood.

Media companies are among the most voracious gobblers of Big Apple real estate. Hearst recently signed an agreement to purchase the commercial portion of The Sheffield, a residential tower south of Columbus Circle adjacent to the publisher’s current headquarters, also according to The Observer. While the company declined to discuss specific plans for the space, the firm has acquired Kaboodle and UGO Networks in recent weeks, though both acquired companies expect to remain in their existing locations. The deal will give the company ownership of 109,000 square feet of space, according to the report.

Heavy.com has also taken on additional space in its current building on West 38th Street, like many other firms owing to steady increases in headcount.

Smaller digital firms are grabbing up space, too. Blip.tv will soon move to a larger office in SoHo that’s twice the size of its current space. The firm has grown from five employees in the past year to 10, and the new office will be 2,200 square feet.