Manhattan Commercial Real Estate for Lease: A Growth-Stage Company's Second Office

How we size a growth-stage floor against the hiring plan

We start from the headcount your board saw for 12 to 18 months out, not from today's roster. At 175 square feet per person, 50 people need about 8,750 rentable square feet. Where more hiring is expected, the usual allowance is another 15 to 25 percent, which puts the same team at roughly 10,100 to 10,900.

The alternative is the tighter floor with the extra room written into the lease as a right. We price both, so the choice is made on numbers.

Matching the term to how far a funded company can see

Leases of 24 and 36 months are common on a private floor, and 12 is possible. A short term costs more per square foot: the landlord has fewer years in which to earn back what it puts into the deal. Longer terms bring more free rent and more money toward the buildout, and they outlast most forecasts.

For a company between rounds we set the term against certainty. Two clear years means a search among landlords who will discuss 24 or 36 months, and anything longer needs the rights below attached.

Three rights that keep a growing company flexible

• An expansion option: the right to take a named suite or floor in the building later, on terms fixed in the lease now.
• A right of first offer: before a named space is shown to the market, the landlord has to offer it to you.
• Sublease and assignment rights let you pass on part or all of the floor if you outgrow it or the plan stalls.

These cost a landlord little on the day of signing, which is when we ask for them, in the letter of intent. Lease options defines each one, and the Series A to Series B playbook goes deeper on leaving room to grow.

What a landlord asks of a company two or three years old

From a young company a landlord asks for security, either a deposit or a letter of credit. It is commonly sized at several months of rent, and higher where there are few years of financials. It usually wants a principal's guarantee too, in New York most often a good guy guarantee, which holds the signer personally liable only until the company gives notice, moves out and has paid through that date.

We present your funding and financials as one organized package, then negotiate the amount of security and a burn-down, meaning a schedule that hands part of it back as the rent keeps arriving on time. Your attorney should confirm how both read in the lease itself. Security deposits and letters of credit explains the terms.

What Nomad does for a company at this stage, search through buildout

• Search: a written brief, then a shortlist that draws on subleases and unadvertised floors as well as published listings.
• Proposals: requested from the landlords of the finalists and compared on effective rent, meaning what each floor costs across the full term after free rent and the landlord's improvement money are taken into account.
• Lease: we negotiate the business terms, and your attorney reviews the document.
• Buildout: managed in-house by Nomad's construction management team, so drawings can begin while the lease is still being negotiated.

One firm carries all four steps. On your search, we work for you, and in most transactions the landlord pays the broker fee.