Mistakes when leasing NYC office space can be costly, especially if you are renting in high-demand commercial real estate areas like Manhattan. The New York City commercial real estate market is different from that of smaller cities. The terms and conditions of lease agreements can vary greatly from what small-market lessees are accustomed. Gaining a better understanding of how commercial real estate works in New York City can help business owners to avoid the most common mistakes made in leasing office space in this vibrant metropolis.
Learn the Language of NYC Office Space
One of the most common mistakes tenants make when considering NYC office space options is not understanding how certain terms and phrases are used within the context of the region’s commercial real estate market. The distinction between rentable square footage (RSF) and usable square footage (USF) offers a prime example of this. Rentable space can include space that is not usable. Rentable space is the square footage without consideration of wall placement, hallways, and common areas. Rentable space can be measured from the external wall of the structure, resulting in a measurement quite different from the amount of space that is actually able to be used.
Prices are often quoted in terms of dollars per square foot of rentable space. Before signing any NYC office space lease agreement, it is essential to make sure you have an accurate measure of usable space. Failure to do so can result in being locked into leasing a space that is not adequate in size.
Plan for the Future when Signing a Lease
So many products and services are instantly available in New York City. In that culture of instant gratification, many people are unaware of the amount of time it can take to finalize a lease agreement. It is a highly competitive region, with some of the most expensive commercial real estate in the world. There are hard borders to expansion – upward is the only direction to expand in much of New York City — which limits the availability of viable commercial space.
Begin the process at least six months in advance, perhaps even a full year for larger spaces, in order to avoid complications when your current lease expires. And be sure to calculate the amount of space your business will require in the future. Commercial lease agreements tend to be for a greater period of time than residential agreements. Three years is the standard minimum for NYC office space, and some landlords seek a minimum five-year commitment. That is a long time in the life of a business, especially when leasing office space for a growing business. Security deposits are usually higher for commercial real estate because of the longer lease period and can cause a bit of hardship for tenants that don’t factor that into their expense estimates.
More than a Signature and a Handshake
Those accustomed to smaller commercial real estate markets often make the mistake of underestimating the value of professional advice. In smaller markets, many business owners are perfectly capable of finding the right commercial space and securing a favorable leasing arrangement. However, leasing NYC office space is different. There’s a lot more involved than looking over a property and sealing the deal with a signature and a handshake. Working with a commercial real estate professional is the most efficient way to find the right space with the most comfortable lease, and to avoid mistakes that can negatively impact your business for years.
Let the professional real estate brokers at Metro Manhattan Office Space help your search for NYC office space run smoothly. Contact Alan Rosinsky at 212-447-5403.