Office Leasing Advisory: Is a Premium Manhattan Address Worth Paying For?

What the premium buys: the building, the address, the systems

• The building. High floors with light and views, amenity floors and conference centers, and an owner with the means to fund an allowance and keep the place running well.
• The address. A tower or a street that candidates, investors and clients recognize without being told. In the loft districts the premium buys character and the best address in the neighborhood, not height.
• The systems. Newer elevators and air handling, and the building services that go with them.
• Often, speed. Many floors at this level are delivered built or furnished, which shortens the move.

What it does not buy is more room. A desk takes the same square feet at any rent, so the premium is paid again on every seat. Class A, B and C explains the grades.

Comparing premium floors on more than the asking rent

• Cost per person per month, not per square foot. Multiply the rate by the square feet, divide by twelve, divide by headcount.
• What is usable. Partial floors and suites carry more shared corridor and core than full floors, and that space is paid for at the same rate.
• What comes with it: furniture, built rooms, wiring. On a finished floor the landlord has already spent the money a raw floor would cost you.
• What sits above the rate: electricity, which runs roughly $2 to $4 a square foot each year; the annual escalations; and operating costs passed through above a base year.

The page for our top price band works these through floor by floor.

When we would talk a client out of the address

Three cases. The customers never visit and the product sells online, so nobody who matters sees the lobby. The premium would be funded by cutting the hiring plan, which defeats the reason a high-growth company takes space. Or the term the landlord wants runs past what the company can forecast. In each, a floor in the working core of the market, minutes away, does the same job for the team at a lower cost per desk. Choosing an office neighborhood covers the client question in full.

When the premium is worth paying

When the address changes outcomes you can name: senior candidates who accept because of where the office is, clients or investors who visit and expect a certain building, or a team that will come in more often for the light, the views and the amenities. Write the reason down and put a number beside it. If the reason survives that, pay the premium and negotiate everything around it.

Negotiation and move-in at the top of the market, in brief

Landlords defend the asking rent hardest at this level, because each signed figure sets the price of the next floor. The movement is in free rent, in a furniture credit where the floor is already built, in the size and burn-down of the security, and in the options. On timing, a floor delivered furnished or built is usually ready two to four weeks from signature, while a space built to order needs 10 to 16 weeks, which Nomad's construction team can price before the lease is signed.

Nomad Property Group is a licensed New York real estate broker, and all of its listings are in Manhattan. In most transactions the landlord pays the broker fee. On your search, we work for you, and since Nomad also offers agency leasing and owner representation, the brokerage page explains how each is handled.