FiDi vs Union Square: Office Space Compared

The $16 gap, and what it is actually buying

Two medians, $72 per square foot per year in FiDi and $88 in Union Square, sit about $16 apart, or roughly 18% off the Union Square number. Against the $75 citywide median across our book, FiDi sits about 4% under the city and Union Square about 17% above it, so neither is cheap in absolute terms. On 5,000 square feet that spread is worth about $80,000 a year.

The premium buys position and scarcity rather than better buildings. Union Square is boutique prewar just north of the park, park light and single-tenant floors, and it rarely has much on the market at once, while FiDi is Manhattan's original downtown, harbor views and modern towers, priced below the middle of the island. Both publish the same $60 to $115 band: FiDi's median sits low because three of its four floors ask $79 or less, and Union Square's rests on two priced floors, since 836 Broadway carries no asking rent.

What we hold in each, and who actually fits

Our book carries 4 floors in FiDi and 3 in Union Square. FiDi spans 2,624 to 6,997 square feet, roughly 15 to 40 desks at the 175 square feet per person we plan to; Union Square spans 2,500 to 13,754, about 14 to 79 desks, a wider range that flatters it until you see the distribution.

• FiDi, 4 floors: 45 Broadway, 2,624 square feet at $60; 4 World Trade Center, 5,023 at $115; 17 State Street, 6,606 at $79; 32 Old Slip, 6,997 at $64.
• Union Square, 3 floors: 29 West 17th Street, 2,500 square feet at $60; 900 Broadway, 4,000 at $115; 836 Broadway, 13,754 with no published rent.

Three of the four downtown floors sit between 5,000 and 7,000 square feet, exactly what a 30 to 40 person company needs, and Union Square has nothing between 4,000 and 13,754. Both ends invert that: under about 15 desks the two are level and their cheapest floors ask the same $60, while above 40 desks FiDi is out and 836 Broadway is the only floor either one holds.

Getting there, and getting your people there

FiDi's lines are 4/5, 2/3, R/W, 1 and J/Z at Fulton and Wall, with PATH at the WTC Oculus. Union Square's are 4/5/6, N/Q/R/W and L, all at 14th Street.

On a count of services FiDi wins, and PATH is the piece to weigh hardest, since a company with real New Jersey representation gets a single-seat commute downtown that no 14th Street address can offer. Geography is what FiDi cannot fix: at the bottom of the island, it is the long end of every ride for anyone living north of Midtown or out in Queens.

Union Square's case is convergence rather than count. Three trunk groups meet at one intersection, the L puts Brooklyn's engineering talent a stop away, and most of the city falls inside a forty-minute door-to-door trip. Recruiting is where that shows up: a candidate already on the L or the Lexington line says yes sooner, and offers you never have to sweeten add up across a five year lease.

Our recommendation, by type of tenant

Companies between roughly 25 and 40 desks should take FiDi, and we do not think it is close. That band is where our downtown book is deepest and where Union Square offers nothing. On 6,600 square feet the median gap alone runs about $106,000 a year, and 32 Old Slip at $64 asks less than three quarters of the Union Square median.

Small teams whose binding constraint is hiring should pay the Union Square premium, and we say so knowing it costs our clients money. Across 2,500 to 4,000 square feet the difference is $40,000 to $64,000 a year, roughly one hire, which a fifteen person company fighting for its next four engineers wins back in shorter searches. The premium scales with footprint, so conviction is affordable at twenty people and reckless at seventy.

Before anyone files FiDi under cheap, 4 World Trade Center asks $115, the same as 900 Broadway, so a tenant can pay full Union Square money without leaving downtown.

Settling it in one afternoon

One day covers both, since the 4/5 that stops at Fulton and Wall also stops at 14th Street. We hold floors in each, so it is one call and four to six floors, which settles what two medians never will. We would start downtown, where there is more to see.

Bring a headcount plan for 24 months out, and ask in each building how much of the rentable area you can actually occupy, since loss factor moves from address to address and a floor asking $64 while carrying a heavy one does not cost $64.

Ask how the escalation is written, whether electric is submetered, and what the landlord wants from a company your age, a letter of credit or a good guy guarantee. Free rent and the improvement allowance decide what you pay across the term. We test fit the floors that survive the day, then work back from your move-in date.