Flatiron vs Penn Plaza: Office Space Compared

The twenty dollar gap, and how much of it is real

The medians are $72 in Flatiron and $52 in Penn Plaza, $20 a foot or about 38%. Against the $75 citywide median across our book, Flatiron sits about 4% below the city and Penn Plaza about 31% below. On the 5,250 square feet both markets offer, $20 is $105,000 a year, over half a million across five years.

Each median is built from different material. Flatiron's is the midpoint of five priced asks, $43, $52, $72, $92 and $115, a spread more than three times the gap between the submarkets. Penn Plaza's is the middle of three, $50 and $52 on consecutive floors of 213 West 35th Street and $135 at 2 Penn Plaza, the second dearest floor anywhere on our book behind the $200 ask at 66 Hudson Boulevard. One number describes a market, the other a cheap building standing next to an expensive one.

What lifts Flatiron's top end is the product, not the address: prewar loft plates off Fifth Avenue and Broadway, high ceilings and sparse columns, taken whole and branded at the elevator. Penn Plaza's West 35th Street floors are garment-era loft leasing below what the same space costs ten blocks away, while 2 Penn Plaza prices at tower rates on top of the station. Strip out the $92 and $115 floors and Flatiron's remainder asks $43, $52 and $72.

What we hold in each, and who can actually fit

Six Flatiron floors across five buildings, 2,940 to 10,562 square feet, 17 to 60 desks at the 175 square feet per person we plan to. Three Penn Plaza floors across two buildings, 5,070 to 6,100 square feet, 29 to 35 desks.

• 17 to 29 people: Flatiron at 900 Broadway (2,940 square feet, $92) and 54 West 21st Street (3,960, $72), joined by the one Penn Plaza floor that is not cheap, 2 Penn Plaza's partial 17th at 5,070 square feet and $135.
• 30 to 35: the band where the money is genuinely contested, and the only one. Flatiron has 5,250 at 30 West 21st Street ($115) and 5,500 at 276 Fifth Avenue ($52); Penn Plaza has 5,250 ($50) and 6,100 ($52).
• 36 to 60: Flatiron only, 8,308 square feet at 137 East 25th Street ($43) and 10,562 at 30 West 21st Street, no published ask.
• Above 60: neither, and the search widens.

The cheapest square foot on this page sits in the expensive submarket: 137 East 25th Street at $43, about $29,770 a month, and it seats about 47, the largest team either market can house at a published rate. 276 Fifth Avenue asks $52, matching the Penn Plaza 11th floor to the dollar. Five Flatiron buildings compete for you; two hold our Penn Plaza space, at opposite ends of the price range.

Getting there, and getting people to agree to it

Flatiron's service is N/Q/R/W, 4/5/6, F/M, L at 14th and 23rd. Penn Plaza's is 1/2/3, A/C/E, LIRR, NJ Transit. The lists share no line. Flatiron's case is that essentially every trunk line stops at 14th or 23rd Street, so the hiring radius covers all five boroughs and reaches New Jersey.

Penn Plaza answers with regional rail. LIRR and NJ Transit at the doorstep collapse a suburban commute into one leg, and the leg that disappears is the transfer at the end of an already long ride. That is a hiring argument when your people commute from Long Island, New Jersey or the northern suburbs.

These are different networks, so this is not a neutral move for the staff you already have. Pull your team's home locations before you shortlist either market.

Our recommendation, by tenant type

Under 30 people, take Flatiron. The only floors that small are there, at $92 and $72: 2,940 square feet at 900 Broadway runs about $270,480 a year, more in total dollars than the 5,250 in Penn Plaza at $50, about $262,500 for 79% more room. Reach 30 within the term and the bigger cheaper floor wins; stay at 20 and it does not.

Between 30 and 35, tour 276 Fifth Avenue before conceding the neighborhood, because at $52 it takes money out of the argument. If a real share of your people board a train outside the city, take Penn Plaza and stop deliberating.

Somebody should pay $115. The penthouse at 30 West 21st Street is 5,250 square feet, exactly the footprint of the Penn Plaza 10th floor at $50: $603,750 a year against $262,500, a difference of $341,250. That is defensible for a venture-backed company recruiting against other venture-backed companies, where the office gets shown to every candidate and costs less than a bad hiring year. Otherwise it is indefensible.

Above 35, Flatiron by default; Penn Plaza holds nothing that size today.

How to settle it in one afternoon

The two markets sit about a dozen blocks apart and we hold floors in both, so one afternoon covers Penn Plaza's two buildings and four or five Flatiron floors.

Ask for a test fit before anyone compares rents. Every footage here is rentable, a leasing convention rather than a measurement of what your team occupies. At the 15-25% loss factors common in New York, 5,250 rentable square feet is roughly 3,938 to 4,463 usable, turning $115 into about $135 to $153 per usable foot and $50 into about $59 to $67. The $72 benchmark is rentable too.

Compare deals rather than asks. Taking rent usually lands below asking rent, and what moves it is free rent, the improvement allowance, electric treatment, the escalation base year, the letter of credit and the good guy guarantee. If you are building out, leave schedule for design, DOB filing and construction. We represent tenants only and can set both submarkets up this week.