The glut of dot-com companies is already showing its plunging bottom lines in the real estate market.
Last month, Internet companies returned nearly 500,000 square-feet of leases back to the market.
Among the largest to bail is is teen-themed Bolt.com, which is bolting from 95,995 square-feet at 195 Broadway.
Other companies returning unneeded space include the 40,000 feet once belonging to bankrupt Pseudo Programs Inc. and 55,000 feet that exceeded Xceed.com’s requirements.
In all, more than 16 companies gave up space. Some of them had signed 15-to 20-year leases only months ago.
Star Media, About.com, Theglobe.com and Working Women Network Inc. also cut office space.
The latest list doesn’t even include the 50,000 square-feet Urbanfetch is no longer using on the West Side since it ceased operations last month.
Could the dot-com fallout turn Silicon Alley into Death Alley?
“It hasn’t really had any real impact other than creating needed space,” says Insignia/ESG Vice Chairman David Levinson.
“There might be some psychological impact. Owners may be a little less aggressive. But the underlying supply-and-demand is very much out of balance. This shakeout is normal and was pretty much expected.”
What will become of the buildings – particularly in the Garment District – that have been specifically renovated by landlords with the dot-com industry in mind?
Levinson noted that despite any Internet shakeup in the Garment District, the area is destined to continue its price climb.