WHERE TO FIND NYC's BEST VALUES IN OFFICE SPACE
Leasing activity is up throughout Manhattan as companies push for and embrace returning to the office. While rents and concessions have seen significant gains in some markets like Grand Central others have been slow to rebound. So the question is where’s the value?
Penn Plaza/ Garment District
The Penn Plaza/ Garment District make is a true tale of two cities. Penn Plaza in reality is made up of Hudson Yards, brand new office space with rents at $100+ / RSF and everything else. The best values are in Class B buildings which are offering steep discounts to attract tenants. For example, Spaces Commercial Real Estate recently represented a client to lease 23,500 RSF at a building on Broadway at a rate of $38.00/ RSF with 8 months of free rent and a brand new installation well below the market average of $56.00/ RSF. Similar space would have leased for $52.00/ RSF with 2 months free prior to the pandemic. On the smaller end of the market Spaces Commercial has also represented clients to lease spaces between 3,000 and 5,000 RSF at rents of $32.00/ RSF with 4-5 months of free rent, and a new build out.
Below are some examples of built and raw spaces priced in the low $30’s/ RSF.
Nowhere in Manhattan will you find better value for Class A office space in Manhattan than the financial district. This is evidenced by the recent leasing activity including Daily Pay’s sublease from S&P Global at 55 Water, Policy Genius leasing 81,000 RSF at 32 Old Slip, and Strook’s renewal. This submarket has the highest vacancy rate in Manhattan at 17.9% and has the lowest average market rent at $56.42/ RSF. Despite these points, the lack of new construction, recent leasing activity, along with renewal of city incentives including the Commercial Revitalization Program (CRP), Lower Manhattan Energy Program (LMEP) and the Lower Manhattan Relocation Employment Assistance Program (LMREAP), coupled with favorable rents promises for a strengthening of the submarket. Learn more about the Lower Manhattan Incentives by clicking here.
Class B Subleases
Even in Manhattan’s most active submarket- Grand Central- there are tremendous value plays. While the Class A market is active, the market for Class A and B sublease space- especially in the 20,000 RSF+ range- is particularly slow with the average time to sublease at 19 months. Tenants could take advantage of built and furnished sublease spaces like this 12,859 RSF sublease at 535 Fifth Avenue to save on rent, furniture, and wiring.
No matter where you want to lease office space in NYC the most effective way to get a great deal is to negotiate effectively. OfficeSpacesNY.com partners with Spaces Commercial Real Estate to help businesses find the right office spaces and negotiate the best deals. Reach out to them at 212-300-3265.
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