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A build to suit NYC office lease can provide your business with an opportunity to custom design its work space economically. Many Landlords will construct a new office for a financially stable Tenant that commits to a 7- 10 year term. Business stability is evidenced by financial statements, tax returns, years in operation and credit reports. Landlord risk is mitigated by a Security Deposit and often times a Limited Personal Guaranty. A 7- 10 year term gives the Landlord time to amortize its transaction costs and achieve a positive return on investment.
A Landlord’s cost of a build to suit NYC office lease is variable. Some factors influencing expenses include: (1) Whether the building uses union contractors for all, some or none of its trades (electricity, plumbing, carpentry, etc.); (2) Architectural, engineering and filing fees; (3) The current condition of the space- is it “raw” or are there building systems already in place (electricity, HVAC, plumbing, etc.); and the (4) Quality of the final product.
Depending on the negotiated lease terms and Landlord policy, the quality of a build to Suit NYC office lease can be determined in different ways. An office may be constructed in the “building standard”. When using a “building standard” the Lease should contain language describing the final product as “substantially the same fit, finishes, features and amenities shown to Tenant in the recently built offices contained in Suite #740.” A more exacting method is a “work letter” where components are specified. For example: 1/2 gypsum sheet rock walls with sound insulation, Armstrong brand 2′ x 2′ acoustical ceiling tiles, 3′ X 8′ solid maple office doors, etc. Some Landlords will disclose the maximum amount of money they will spend per square foot (ranges from $45- $65) on a build to suit NYC office lease and if there are cost overruns they are reimbursed by the Tenant. In a similar manner “upgrades” are also paid for by the Tenant. An example of this might be the use of marble flooring instead of carpet in the reception area.
By using an experienced Tenant Representation Broker you can obtain the optimal build to suit NYC office lease. Cogent Realty Advisors is a NO FEE Commercial Broker with over 15 years of success representing local business. Contact Mitchell Waldman today: (212) 509-4049.
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