Startup Office Space for Lease: The First-Lease Budget, Rent and Everything Else
Startup office space for lease comes in three forms: a direct lease on a raw or pre-built floor, a sublease of another company's space, and a furnished floor on a shorter term. Whichever you take, a startup signing its first lease should budget for more than rent. Electricity is billed separately, the rent escalates each year, and the landlord will ask for a security deposit or letter of credit, usually a larger one from a young company. Furniture and cabling come next unless the floor is furnished. We build that budget with you before the first tour and tell you which documents to have ready.
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Build my first-lease budgetUpdated 2026-10-03 · Nomad Group
The first-lease budget, line by line
- Base rent. Quoted per rentable square foot per year: multiply by the square feet and divide by twelve for the monthly figure.
- Electricity. About $2 to $4 a square foot annually, submetered or charged by the foot.
- Escalations. Around 2.5 to 3 percent a year, compounding through the term.
- Security. A deposit or letter of credit equal to several months of rent, posted at signing.
- Furniture and cabling. New furniture costs $2,000 to $4,000 a desk, unless the floor comes furnished.
- Buildout above the allowance, if the space needs work. A pre-built floor removes this line.
- Cleaning, internet and the insurance the lease requires.
What office space really costs turns these into a monthly figure per person.
What a landlord asks a first-time tenant for
A company with no leasing history is judged on its finances. The landlord reviews your financials, and evidence of funding or revenue is what it looks for. Security is posted as cash or a letter of credit, and a young company should expect to post more of it.
Companies without an operating history are also usually asked for a good guy guarantee: a limited personal guarantee under which the exposure ends once the company gives notice, moves out and returns the keys with the rent paid up. A larger letter of credit can sometimes take its place. The amount of security, its form and a schedule that reduces it after on-time payment are all negotiable. Have your attorney confirm what any guarantee commits you to. The good guy guarantee explains the mechanics.
How much space to lease, and which of the three forms
Plan on 175 square feet per person, and add 15 to 25 percent if you expect to hire. Then match the form to how sure the plan is.
- A sublease is usually cheaper and quicker, and you take it largely as it stands.
- A pre-built or furnished floor is ready two to four weeks after signing and is often offered on a shorter term.
- A direct lease on raw space brings an allowance and free rent, in exchange for a longer commitment and a buildout of 10 to 16 weeks.
The pre-built entry compares a finished floor with a custom one.
Chelsea floors, and buildout help once the lease is signed
The block on this page shows Chelsea, the loft district west of Sixth Avenue between 14th and 30th Streets, with the A/C/E, 1 and F/M trains at 14th and 23rd Streets. Our neighborhood guide describes it as the value end of the Midtown South corridor, and as the weakest of those districts for anyone commuting from the east side.
If the floor you choose needs work, Nomad's construction management team prices the buildout while the lease is still being negotiated, which puts a real estimate behind the allowance you ask for. The same team then manages the contractor through to move-in.
Chelsea office space available now
Live from our listings · 6 of the 9, cheapest first9 offices are available in Chelsea right now, from 2,937 to 18,668 square feet, asking $44 to $64 per square foot per year. The Chelsea median is $56.
- Floors
- 9
- Sizes
- 2,937-18,668 sq ft
- Asking rent
- $44-$64 / sq ft
- Median
- $56 / sq ft
- 237 West 27th Street, Entire 11th Floor 7,158 sq ft $44/sq ft about 41 people
- 127 West 26th Street, Entire 7th Floor 9,500 sq ft $50/sq ft about 54 people
- 151 West 26th Street, 12th Floor Penthouse 17,610 sq ft $56/sq ft about 101 people
- 104 West 27th Street, Entire 9th Floor 7,047 sq ft $59/sq ft about 40 people
- 275 Seventh Avenue, Entire 24th Floor 18,668 sq ft $63/sq ft about 107 people
- 151 West 26th Street, Partial 10th Floor 9,000 sq ft $64/sq ft about 51 people
The full guide
This page is the short answer. The long one, with the numbers worked through, is here:
Related topics
- Move-In Ready Office Space for Startups: Why It Usually Fits, and When It Does Not
- Fully Fitted Office Space: What Fitted, Furnished and Turnkey Each Promise
- Flexible Office Spaces for a Growing Team: A Finished Floor With Room to Hire
- Pre-Built Office Spaces for Startups: Pre-Built or Custom, in Weeks and Dollars
Why use a broker on a startup's first lease instead of calling listings?
The agent on a listing works for the owner and shows that owner's buildings. A broker on your side compares every floor that fits and negotiates the terms around the rent. In most transactions the landlord pays the broker fee. On your search, we work for you. Nomad also offers agency leasing and owner representation, so ask about conflicts on any building.
Does a startup need venture funding to lease an office?
No. A landlord wants to see that the company can carry the rent, and revenue, cash on hand and backing all count as evidence. Where the record is short, a larger deposit or a guarantee usually closes the gap.
How fast can a startup be working in its first leased office?
Two to four weeks from signature when the floor is furnished or pre-built. Add the search and the lease, and a decisive team is in within six to eight weeks of its first tour. If the space has to be built, allow four to six months from start to finish.
What should we send to get first-lease options?
Headcount, timing and a monthly budget are enough. A broker reaches out within the hour during business hours, and a first shortlist can be ready within 24 hours, each floor with its size and asking rent.
Talk to a broker
Want this answered for your team?
Tell us three things: team size, timing, budget. A first shortlist can be ready within 24 hours, with the asking rent on every floor that publishes one.
- Within the houra broker reaches out during business hours, no automated triage
- On your sidewe work for you on your search, and the landlord usually pays our fee
- Open pricingasking rent published for 46 of 49 floors, size and address for all
- 300+ officesdelivered in New York, 2M+ sq ft leased
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