If your business is getting ready to lease office space in Manhattan, one question tends to surface before any others. How much will a broker cost me?
Certainly a reasonable worry. But the truth is, the answer is a pleasant surprise for most tenants. In the typical New York City office lease, commercial real estate broker fees are paid by the landlord, not by you, the tenant moving in.
Still, knowing who signs the check is the easy part. What matters far more for your bottom line is how those fees are built and whose side your broker is actually on. The way a commission is structured and the alignment behind it will somehow, someway, shape your rent, your concessions, and your leverage at the table.
Below, we walk through the economic structures, the three kinds of brokers working the market, and the conflicts of interest that decide what you end up paying.
How Commercial Real Estate Broker Fees Are Structured
Commercial commissions are always negotiable, and in New York City office leasing the landlord almost always pays them. The exception is a sublease: when you sublet space you already hold, you cover the commission as the outgoing tenant, so review your sublease and assignment clause early. Conventions set by the Real Estate Board of New York (REBNY) still guide most owners and brokerage firms, and three structures cover nearly every deal: a percentage of the rent, a fee per square foot, or a flat amount.
Percentage of the Rent (the Standard)
This is by far the most common approach. The commission is figured as a declining percentage of the base rent over the initial lease term, and it is calculated on base rent only, not on escalations or extra charges. A widely used REBNY-style schedule runs around 5% for the first two years and 4% for years three through five, and tapers after that. Your representing broker, the one on your side, typically earns a full commission. In contrast, the landlord’s listing broker earns half, so a longer lease term means a larger total payout, all of it covered by the landlord.
A Fee Per Square Foot
Some deals price the commission as a flat dollar amount per rentable square foot instead of a percentage of rent, so you multiply the square footage by the agreed rate to get the fee. Owners like how cleanly it tracks the size of the space. In practice, though, I have never seen the per-square-foot method used on a New York deal. What I have run into are broker bonuses, the occasional sweetener a landlord pays on top of the standard commission, now and then as a prepaid credit card. I am still buying groceries on mine from 2019. Whatever the fee structure, it helps to know your real footprint first, and our office space calculator gives you a fast estimate.
A Flat Fee
A handful of smaller landlords skip the percentage and pay a flat fee, often one or two months’ rent. Often, though, it backfires, since tenant brokers gravitate toward owners who pay a full commission. Those who are tight with the fee are almost always tight everywhere else too, from the improvement allowance to the building’s upkeep, so a skimpy commission tells you plenty about life as their tenant.
The Three Types of Commercial Brokers in NYC
Brokers in New York handle roughly nine out of ten commercial leases, and the smallest deals make up most of the rest. From the outside, the field looks like one big crowd, but it really sorts into three groups. Knowing which one is sitting across from you tells you almost everything about whose interests are being served.
Landlord Brokers
Most commercial brokers in the city work for building owners, not tenants. You will find them at the large firms such as JLL, CBRE, Cushman & Wakefield, and Newmark, often assigned to a handful of specific buildings. Their mandate is straightforward: lease their client’s space on the best possible terms for the owner. In other words, securing the maximum rent and giving away as little as possible in concessions.
This matters most when you approach a building directly. The on-site agent may be genuinely charming and helpful, but those qualities are part of the job, not a sign they’re working for you. They’re under real pressure to deliver for the landlord, and every dollar of free rent, every improvement allowance, and every flexible lease term they don’t have to give you is a win for their client.
A tenant who assumes the agent across the table is looking out for them has misread the relationship from the start.
Tenant Representation Brokers
A tenant rep broker is tied to no building and works exclusively for you and your interests.
A good one starts by taking the time to understand your business: how you use your space, how many people are on your team, what amenities you need, where your key transportation hubs are, where your growth is headed, and any special objectives that shape the search. Only after building that picture do they draw on the industry’s main database, CoStar, and research the market for space worth showing you.
Pulling a listing is easy, though, so the real skill lies elsewhere. It comes from years of closing deals and learning how individual owners behave on deposits, free rent, and timing. When you decide to move, that experience is what helps you draft the offer and position your tenancy to obtain the maximum possible from the landlord. That knowledge serves you whether you run a law firm, a financial services shop, a medical practice, or a growing tech startup, because the right space depends on who you are, not on who the broker already represents.
Dual-Rep Brokers
The third type is a landlord rep who will also take on tenants, and the conflict here is not subtle. Picture an agent who covers a building and fields a call from a prospective tenant. What does that agent do first? They steer the tenant toward their own building, whether or not it fits. The reason is plain economics, because a broker would rather keep a major landlord happy for years than optimize one deal for a tenant they may never see again. That incentive points away from you.
Conflicts of Interest: How Broker Alignment Affects What You Pay
Here is where alignment turns into dollars. The broker you choose and the side they sit on change how hard a landlord pushes and how much you give up to close. Over more than 400 leases, I have negotiated only for tenants, and the same conflicts surface again and again. These five are the ones worth watching.
1. Steering Toward In-House Listings
If the agent works for the landlord, you may never be shown the space that suits you best. A landlord or dual-rep broker has every reason to walk you straight into their own building, even when a better fit sits elsewhere. I once met a tech founder who had toured one space with a listing agent and assumed it was their best option. After we widened the search, we landed them in a better-fit, lower-cost space in Midtown South, where that agent never would have sent them.
2. Concessions You Never Hear About
Landlords routinely offer free rent and money toward construction, but a listing broker has little reason to volunteer those perks. On a recent 4,000-square-foot law firm deal, I secured several months of free rent plus a build-out allowance that had not been on the table. Understanding who pays for the build-out is often where the savings hide.
3. The Inflated Security Deposit
Owners often open with a steep deposit, sometimes eight to twelve months, and an unrepresented tenant accepts it. With a startup client recently, we cut an eight-month demand down to four and added a burn-down so the balance drops as rent is paid on time. Going in informed about your security deposit keeps real capital in your account.
4. Lopsided Market Information
Asking rents and the rents owners actually accept are two different numbers, and the landlord’s broker knows the gap, while you usually do not. When I represent a tenant, I lean on current data to press the point. Manhattan availability sat near 13.7% in early 2026 per Colliers, which gave one client room to negotiate below the quoted rate in the Financial District.
5. Small Tenants, Junior Attention
Bring a 2,000- or 5,000-square-foot requirement to a giant firm. Not only could your deal look tiny. But you could find the commission split several ways, and the work handed to a junior agent. A small team weighing coworking against a first lease deserves better than that. Working with a focused tenant rep makes your search the priority it should be. A strong tenant proposal package puts you in a stronger spot from the first offer.
The Bottom Line on Commercial Real Estate Broker Fees
So here is the takeaway. In the usual New York office deal, commercial real estate broker fees are the landlord’s responsibility. Meaning having your own advocate rarely costs you a dime. The structure of the commission, whether percentage, per-square-foot, or flat, matters less than the question of alignment. What truly moves your rent and your terms is whether the person at the table answers to you or to the owner.
The Manhattan market is enormous, with roughly 4,000 commercial buildings. And it’s busier than it’s been in years. Leasing opened 2026 on a strong note, with one of its busiest first quarters in years. So good space is moving quickly. In a market like this, the gap between a conflict-free advocate and no advocate at all shows up directly in the terms of your lease and the properties you see.
If you want a straight read on the market and your options before you tour a single floor, that’s the conversation worth having. You can browse current Manhattan listings or reach out directly.
