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Dot-com frenzy is accelerating the Manhattan space race.
At least a dozen new media companies are joining giant Wall Street firms in scouring the city for big new offices, a sign that no slowdown is in sight for the red-hot real estate market. Searching as they are in the toughest tenant market in years, new media entrepreneurs and old-line institutions are expected to drive up rents, exacerbate a scarcity of large blocks of vacant space-and deliver windfall profits to landlords in several neighborhoods. Some companies will be forced to leave Manhattan to get more room.
"Space is very hard to find," says Mark Mandell, a Cushman & Wakefield Inc. director who represents dot-com tenants. "It's approaching the point of crisis, where something's got to give."
Not quite monsters yet
Though Internet firms haven't yet hit the level of a Deutsche Bank, which wants 1 million square feet, they're becoming increasingly frequent seekers of offices of 100,000 square feet and more. Dot-com leases of this size were virtually unheard-of in Manhattan until just a few months ago.
The number of Internet businesses looking for large offices is expected to keep increasing, as smaller Manhattan firms carry out lightning-fast expansion plans that are being fueled by venture capital and stock market riches. This number will be further swelled by firms that are starting to arrive from London, Paris, Berlin, Tel Aviv and the industry's West Coast strongholds.
Big-space hunters now include Scient Corp. and Razorfish Inc., each of which wants...