How Long Will It Take You To Lease a New Office In Manhattan?
The commercial leasing process in New York City generally lasts anywhere from a few months to a year. In order to estimate the length of time it takes to acquire a new space, it is essential to understand the key steps involved; from determining your architectural needs, searching for the right space, negotiating business terms and lease language, to completing construction. Contact a commercial real estate professional at (212) 444-2241 who can explain the steps below in detail and help you lay out a course of action to locate the perfect Manhattan office rental for your business or organization. The timeline described below applies to any types of commercial real estate rental in New York City, be it office, loft, retail or showroom space.
Determining Your Office Space Needs (2-3 weeks)
Before embarking on a search for a new office, make sure you have answers to the ten key questions that any real estate professional will ask you:
- What are your architectural requirements, how much space do you need?
- How do you intend to use your space (conventional office, medical use, showroom, art gallery, back office)?
- How many employees are you projecting over the term of your lease?
- Are you willing to sign a lease for two, three, five, ten years?
- What is your all-in budget covering rent, electricity and miscellaneous charges?
- Do you have a preference for a particular neighborhood?
- What Class commercial building do you prefer: A, B, C?
- Are you seeking a conventional office space or a commercial loft space?
- Does your company have any specific telecommunications needs?
- When do you need possession of your new space?
Assuming you have a broker representing you, this information allows him to calibrate his search and select properties that best meet your search criteria. Such seemingly simple questions such as “how much space do y0u need” can be a challenge to answer due to the way landlord’s measure office space in Manhattan.
The Property Search and Selection Process (1 week-3 months)
Drawing upon his knowledge of available listings, plus New York’s current commercial real estate trends, your broker will set up specific property tours in neighborhoods suited for your needs. During these inspections, he will provide you with key details on each space (asking rent, energy and utility costs, annual lease escalation, hidden charges, potential landlord concessions). After several tours, the broker and tenant should be able to select the right space. Once you have zeroed on a property, you can expect your agent to help you plan a preliminary architectural layout even if you choose to hire an architect to draft final plans.
Negotiating Business & Lease Terms (1-3 months)
Reaching agreement with a landlord for an office rental is a two step process: first there must be a meeting of the minds regarding business terms, then agreement has to be reached on specific lease language. Your broker will work with you to negotiate the most favorable business terms. But keep in mind, that usually, there are several rounds of offers and counter offers before reaching a consensus.
These terms include: property use, base rent, annual escalations, lease term, lease commencement date, rent commencement date, security deposit and landlord’s work.
Once the business terms have been set, the landlord’s attorney issues a draft lease. Then the draft lease is reviewed by the tenant’s real estate attorney who compiles a list of comments which are then sent to the landlord’s attorney. The lawyers work together to create a compromise in lease language that is acceptable to both the landlord and the tenant. Negotiating the lease language usually takes a few days to a month, depending on the complexity of the lease.
Office Build Out (2 Weeks-6 Months)
One of the most important terms of a commercial lease document is build out, or, the way in which your new office space will be constructed to meet your needs. The lease clearly states who will pay for the build out, construction specifications (layout, materials, workmanship), as well as the substantial completion date for the landlord’s work.
The time it takes to construct a space varies greatly. If your new office rental only needs paint and carpet, the landlord’s contractors can complete this within a few weeks. However, if you requires new plumbing, electrical distribution, installation of HVAC and ductwork, and the construction of offices and conference rooms, then timeline for construction increases considerably.
Be Sure to Plan In Advance!
Timing a commercial real estate acquisition is essential to the financial well being of your business. You could be liable for substantial holdover penalties from your existing landlord if you haven’t lined up a new space once your existing lease has expired. On the other hand, you risk being on the hook for double or even triple rent (read the holdover clause of your existing lease) if you sign a lease too soon.
To learn more about this process, contact Alan Rosinsky at (212) 444-2241 at Metro Manhattan Office Space, Inc..