Few commercial real estate markets in the world rival that of New York City, where locating and leasing the right office space is paramount for a startup business. From the Upper East Side to SoHo to Hudson Yards, entrepreneurs will find that there is intense, fast-moving competition for desirable Manhattan office space for rent.
The task of finding office space suitable for startups and small businesses is even more daunting in 2019, as office rents have reached a new post-recession peak, and they continue to increase. In Hudson Yards, the poshest business cluster in the city at the moment, office rents often exceed $100 per square foot, while in FiDi or the Plaza District, spaces go for upwards of $88 per square foot. Finding quality, yet affordable office space, especially for small businesses with a tighter budget, is like finding a needle in a haystack.
Understand the Office Landscape in NYC
The ideal office space for a web-based startup is vastly different than the ideal location for a financial services provider. Tech startups often prefer office spaces with open-floor plans, high ceilings, and concrete or wooden floors, properties more commonly found in SoHo, Tribeca, Chelsea, Union Square, the Flatiron District or the Garment District. Meanwhile, business owners in more conservative industries such as accounting, financial services and legal services typically prefer the more traditional office buildings found in Lower Manhattan, Grand Central Station, Times Square, Columbus Circle and other popular Manhattan business districts.
However, many companies are taking advantage of the state-of-the-art office space in Hudson Yards, the city’s newest submarket, which is still under construction. Major corporations like Pfizer, WarnerMedia, Amazon, BlackRock or Ernst & Young have made the move from the limestone office towers in FiDi or the Plaza District to the glass-clad buildings in Hudson Yards. These companies are drawn to the top-notch features and amenities that these newly built office towers have to offer, which in turn attract top talent. Office space in Hudson Yards comes at a premium, though, with lease rates exceeding $100 per square foot, making it unaffordable for most early stage businesses and small startups.
Office rents in Manhattan are not for the faint of heart
As we’ve already mentioned, the office leasing market in Manhattan is highly competitive, and there are numerous startups launching every day in the city, all fighting to find that perfect office space.
Manhattan office space for rent typically runs anywhere from $30 to $120 per square foot, depending on the amenities and services offered by the building and the desirability of the neighborhood in which it resides. In Midtown, for example, the high demand for office space has fueled rental rates to climb upwards of $88 per square foot. The desire of technology and media organizations to establish themselves in Manhattan has greatly impacted commercial office space rental rates throughout the borough.
Rental rates do vary throughout New York City, from premium locations in the Plaza District, Rockefeller Center, Hudson Yards and Times Square, to more affordable areas such as the Financial District, Chelsea and the Garment District. Regardless of cost, nearly all commercial spaces in Manhattan are in high demand, and startups need to act quickly once they have identified their preferred region. It is a landlord’s market, and desirable space does not stay on the market for long. Often, a location in high demand will elicit multiple offers from business tenants seeking to lease space, that’s why you need the help of a broker who knows what is available on the market at any given time.
Expect an elevated security deposit
During lease negotiations a start-up business in NYC may also find itself at a disadvantage due to the fact that landlords often prefer commercial tenants with a proven track record. Because they’re sometimes viewed as being potentially risky tenants, start-ups are often required to pay an elevated security deposit. An experienced real estate broker can be of great assistance in helping a start-up find the right Manhattan office space for rent and negotiating the lowest possible security deposit. Brokers know what to ask a landlord and how to ask for it, and their understanding of the marketplace gives them privileged information as to which landlords are offering the most aggressive deals.
Define your Real Estate Needs Before Looking for Space
In order to determine ideally sized office space, a startup business in NYC should discuss with their real estate broker various aspects of their operation, including the size of their workforce, projected expansion plans that might require larger offices in the future, and the intended use of the space. Location is also important in how it impacts employees and potential clients. In any case, your real estate search will quickly show that Manhattan office space for rent is available for businesses of all sizes and types.
Lean on an Experienced Real Estate Broker
Our experienced and versatile brokers at Metro Manhattan can assist you in your search for the perfect startup office space in various ways. They can help you nail down your specific needs and wants, and help you better understand the market you’re trying to enter. They will take on the task of researching the market for available or soon-to-be-available office space that matches your requirements, and they can get in touch with the landlord or marketing team immediately. Moreover, our agents can schedule property tours of potential spaces or accompany you on such tours, pointing out the benefits and downfalls of each space. Finally, our agents can draft offers and counter-offers on your behalf and negotiate the most advantageous lease terms for your business.
If you’re gearing up to launch your own business, or your startup is growing fast and you’re looking to lease an office, call Metro Manhattan Office space at (212) 444-2241, or email us at [email protected], and our brokers will get back to you as soon as possible.