GCSA completed a survey of over 400 manufacturers in the Garment Center. The results both showed a vibrant ecosystem of manufacturing as well as revealed vulnerabilities of an apparel industry under threat.


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Survey Overview

Timeframe: May 2017 – July 2017

Sponsored by: GCSA Foundation

Scope: 413 manufacturing firms covering 1.4 million square feet. Out of 413 manufacturing owners, GCSA completed 157 in-depth interviews.

 

 
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Machines on site, transformation of raw materials for clients

(GCSA Definition of Manufacturing)

 

The Nyc apparel Industry Remains Extremely Concentrated, Making It Efficient And Competitive.

  • Map distribution shows that the zoning (contained by the black boxes) anchors the industry with about 900k square feet, which draws related businesses to build and grow in areas close by.
  • Top 20 Buildings make up 1.1M Sq Ft in manufacturing space, distributed across 312 firms.
  • 270 West 38th street is the highest concentration of manufacturing in the Garment District hosting 141,814 sq ft of manufacturing in the building.
 Source: GCSA 2017 Survey Map

Source: GCSA 2017 Survey Map

 

Most Leases are Running Out, Making the Industry Vulnerable to Displacement.

Of the 157 owners that were interviewed, few felt they had long term real estate security.

  • 67% of factories have fewer than 2 years remaining on leases
  • 96% of factories have fewer than 5 years remaining on leases
  • 4% of factories have leases with 5+ Years Remaining
  • 99.8% of Participants not moving are interested in Long-Term Leases (Only ONE participant was NOT interested)

Time Left on Lease

With the majority of manufacturers on short term leases, there is little to no security in real estate for manufacturers.
 

Short leases prevent manufacturers from investing in Advanced Machinery

Since majority of firms are on short term leases (67% with 2 or under, 96% with less than 5 years), many cannot invest in the newest equipment and updated technology, which are often difficult and expensive to install.

 

Age Distribution of Manufacturing Firms Suggests Healthy Industry

  • 18% in business in the Garment Center for over 30 years, shows staying power and resilience
  • 31% of firms are 10 years and younger, demonstrates a healthy influx of new blood
  • 51% have been in business between 11-30 years, remaining relevant over an extended period

Firm Age Distribution

31% of firms are 10 years and younger, demonstrating a healthy influx of new business.
 
My factory was located on west 37th street and had a whole floor for over 30 years. I was paying $40 PSF on my lease, but when my lease came up for renewal this year, my rent was going to double. I had to stay in The Garment Center so now I’m subleasing a space that’s half the size on west 39th street.
— Source: GCSA 2017 Interview Response
 

92% OF MANUFACTURERS RENT $40 PSF AND BELOW

Distribution of firms by Rent per square foot shows that zoning has kept rents low for manufacturers.

  • Garment Center Market Rate (according to Q4 2014 report) Reported to be $51 PSF*
  • According to GCSA Survey, Average Rent for Manufacturers $30.95 PSF
  • 92% of Manufacturers have rents $40 PSF and lower
  • 88% of Respondents said Moving Out Of Garment Center Not an Option

% of Firms x Rent PSF

The current zoning keeps manufacturer's rents about $20 below market rate*.

*2014 Rent Source: The Real Deal

 

The Garment Center Relies On A Citywide Workforce

The Garment Center has a diverse workforce of immigrants and is located at the center of Manhattan, close to Penn Station - a central transportation hub. Penn Station means that workers from Queens, Bronx, Manhattan, and Brooklyn can commute to work easily and still be home in time for their families.

  • Interviews of 157 firms employed 2,692 employees (about 18 employees per firm)
  • 84% of factories employ workers from Queens.
  • 27% of factory owners said ALL of their workers were from Queens
  • 17% Firms employed some Bronx employees
  • 41% Firms employed some Brooklyn employees, but only 4 firms or 2.5% had all employees from Brooklyn
  • 27% Firms employed some NJ employees
 

88% of Respondents said moving out of garment center not an option

Most said they would rather shut down than move their business away from customers and workers.

 

SURVEY SUMMARY

Survey confirms significant manufacturing activity exists in The Garment Center.


Square footage and employee count may be double (or more) if extended beyond The Garment Center hub.


Desire for long term leases by manufacturers in The Garment Center is confirmed.


With the current zoning, rents for manufacturers are lower than market average.


Majority of manufacturers are on extremely short-term leases.


The effects of higher rents and/or non-renewal of leases are unknown, but based on stories and data presumed to have some negative impact on manufacturing in the Garment Center.


Questions? Reach out at info@nygcsa.org.