THE RIGHT OFFICE AT THE RIGHT PRICE!
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Hedge Fund, Private Equity and Venture Capital sublease office space availability is increasing. The most significant factor behind this is the opening of new office towers that are accelerating the early relocation of Tenants from older properties. At Year-end 2018 there was 17,261,375 square feet of office space under construction in New York City. In the Hudson Yards alone, 6,372,000 SF of new offices will be delivered in 2019. A second contributing factor is the “densification” of office premises. In plain terms this means that businesses are reducing the amount of square feet that is leased and allocated to each employee.
Cogent Realty Advisors is an independent and licensed NO FEE Realtor with 20 years of experience representing businesses that lease NYC office space.
As supply of office space increases and job growth levels, pricing per rentable square foot should decline. Costar reports an average quoted rent for DIRECT LEASE offices of $62.00 per square foot at the end of 2018 and a vacancy rate of 7.9%. Detailed information about offices in 20 neighborhoods can be found HERE.
At the end of Q4 2018 the amount of SUBLEASE office space in NYC increased to 5,014,514 square feet compared to 4,804,728 in the prior quarter. In almost all instances, SUBLEASES provide a discount when compared to direct leases.
Other tangible benefits with a SUBLEASE may include the following:
(1) Subleases are typically rented in a pre-built condition which can reduce the waiting time needed to move-in.
(2) Many subleases include furniture, an IT network and phones. This amounts to large cost savings.
(3) The length of a sublease term may vary widely from as short as a few months (called “swing space”) to ten years.
(4) Because the transaction expenses associated with a sublease are usually less than a direct lease, the Security Deposit requirements may be reduced.
Cogent Realty Advisors was asked by a financial services company to identify sublease office space in Midtown with a lease term under five- (5) years. The office needed to be within a 10 minute radius of Grand Central Station either by walking or subway. A partial list of our findings follows:
7 TIMES SQUARE: 3,367 RSF. Ask $79. Term to 4/22.
650 FIFTH AVENUE: 6,665 RSF. Asks $69. Term to 3/25.
555 Madison Avenue: 5,828 RSF. Asks $65. Term to 6/21.
410 Park Avenue: 3,330 RSF. Ask $66. Term to 3/21.
*Call for plan.
1350 Avenue of the Americas: 3,391 RSF. Asks $65. Term to 8/21.
ABOUT COGENT REALTY ADVISORS
Cogent Realty Advisors is an independent and licensed NO FEE Realtor with 20 years of experience representing businesses that lease NYC office space. Our goal is to help you find the right office at the right price. For information, phone Mitchell Waldman at (212) 509-4049.
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