If you’re about to begin your search for office space in New York City, you may understandably be overwhelmed. A city as fast-paced and competitive as New York can make things challenging.
To help you navigate this process, we put together a list of eight key questions you should ask yourself before beginning your search. Whether you’re a startup, a small business, or an established corporation, these questions will help you make an informed decision and find the space that best fits your needs.
1. How Much Office Space Do I Really Need?
Figuring out the ideal square footage for your business can be complex. Still, it’s essential to ensure you find a space that meets your current and future requirements.
Take the following factors into account when determining ideal square footage:
- Existing employee headcount
- Type of business
- Client and visitor needs
- Projected future growth of your staff
- Square footage of your existing space
- Optimal layout for your new space
To simplify this process, consider using our office space calculator. This calculator will generate your approximate square footage based on inputs for employee headcount, desired layout, and more.
2. What Is My Monthly Budget for Commercial Rent and Utilities?
When searching for office space in New York City, setting a realistic budget for rent and utilities is crucial.
Before embarking on your property search, the first step is to determine how much you’re willing and able to spend on monthly rent. Your broker will need this information to research relevant listings.
However, what’s even more important is to provide your broker with an all-in budget that considers the base rent and additional expenses such as energy, water, sprinkler, security, security charges, and rubbish removal fees. These extra charges can add up quickly and significantly impact your overall budget.
Furthermore, remember the security deposit. Landlords typically require one paid at the lease signing, ranging from two to six months’ rent.
3. What Is the Best Neighborhood to Rent Office Space in New York City?
Ultimately, the best neighborhood for your business depends on your unique needs and priorities.
Is proximity to transit hubs like Penn Station or Grand Central Station more important? Or is leasing office space close to key clients more important? What about the neighborhood itself? Are there restaurants, cafes, shops, and a vibrant atmosphere that employees and customers will enjoy coming to?
4. Do I Need to Rent Office Space in a Class A, B, or C Building?
Choosing the right building class for your office space depends on various factors, including your budget, business needs, and desired location.
Suppose you prioritize being in a prestigious location with top-of-the-line amenities and finishes. In that case, a trophy Class A property suits you. However, ensure you have the budget; they have the highest price tag.
If you’re looking for a more unique or creative space with character, consider office space in a Class B or Class C building or loft. Class B buildings tend to be older than Class A buildings but still offer good amenities and finishes. Class C buildings are typically the oldest and have fewer amenities. However, they offer character and significant savings on your rent.
It’s important to discuss your priorities and budget with your broker to determine which class of building is best for your business. They can help you navigate the options and find a space that meets your needs while staying within your budget.
5. What Is My Preferred Lease Term?
Considering both short-term and long-term options is essential when evaluating commercial lease terms.
An established business with predictable space needs will likely have no interest in relocating and prefer a long-term lease. A long-term lease provides stability and predictability and may come at a lower rate.
On the other hand, if your business is in a growth phase or you have uncertain growth prospects, a shorter-term lease may be a better fit. Short-term leases do not lock businesses into a long-term commitment should their needs change and evolve. However, it’s important to note that shorter lease terms may come with higher rental rates and landlords less willing to cover build-out costs.
6. Do I Need a Specialty Build-Out?
When searching for office space in New York City, it’s essential to consider whether you require a specialty build-out or customization to suit your business needs. It’s also important to remember that construction costs are expensive, and build-out costs frequently fall on the tenant’s shoulders.
Thus, it’s advantageous to work with a landlord willing to build out the space and cover at least a portion of construction costs. In addition, many landlords are willing to invest in improvements for new tenants, especially if the lease term is long enough to amortize the construction costs.
Discussing your build-out requirements with your commercial real estate broker and landlord early in the leasing process is important. They can help you determine the feasibility of your customization needs and negotiate the build-out costs and responsibilities.
7. My Startup Needs an Office. Which Landlords Are Startup Friendly?
However, many New York City commercial landlords are still open to leasing space to startup tenants.
It’s worth noting that landlords may require additional information and assurances from startup tenants to mitigate their risk. For example, they may ask for a larger security deposit, especially if the company has yet to turn a profit. To reassure a potential landlord, provide them with financial statements, tax returns, and bank statements with your offer so they can assess an appropriate security deposit.
8. Should I Sign a Lease Renewal Instead of Relocating?
One advantage of signing a lease renewal is that landlords often offer favorable terms to existing tenants to retain them. In addition, as an existing tenant, you may have an advantage in securing additional space within the same building.
However, it’s important to thoroughly evaluate your options and consider your company’s future growth plans before committing to a lease renewal. Relocating to a new space may give you more flexibility and better accommodations for your business needs.
The Key Takeaway
Renting office space in New York City is often a time-consuming and complex process. However, there are specific steps you can take to ensure that you find the perfect space for your business needs.
One crucial step is to ask the above 8 questions before you make any decisions. By taking the time to consider key factors and answer detailed questions, you can narrow down your options and find a space that meets your unique requirements.
Additionally, working closely with a commercial real estate broker can provide valuable insights and guidance.
Carefully evaluating options can simplify the otherwise complicated process of renting office space in New York City.
Ultimately, your goal is to do what’s best for your business. Answering these questions can help you achieve a successful outcome.
Metro Manhattan Office Space has helped hundreds of businesses answer these questions and find office space in New York City.
To learn about available office space, call Metro Manhattan Office Space at (212) 444-2241 or email us at [email protected].